Cathedral City business owner Michael Petronella and his wife were arrested this week in Orange County.
The District Attorney there says Petronella and his wife are guilty of the largest known worker’s compensation insurance fraud scam in state history.
Officials say between 2000 and 2008, their payroll was $29 million, but they only reported $3 million.
Investigators say instead of actually paying to insure his employees from injury, Petronella spent it on expensive jewelry and fast cars. He also owned a condo at Palm Valley Country Club in Palm Desert.
Petronella’s company fixes roofs at many Desert country clubs. Monterey Country Club’s board president tells us they kicked Petronella’s company out late Thursday.
“We contacted our corporate attorney and he suggested that, for our own protection of liability, that we lock them off the site,” said Rick Lebel with Monterey Country Club.
Some roofs still have holes in them because Petronella’s company got kicked off site so quickly.Sixtyhomes were being worked on by Petronella’s company, as of late Thursday.
Petronella’s competitors include Al Miller and Sons roofing company in Cathedral City. Its manager says they tried to warn state officials long ago of Petronella’s unfair business practices.
Manager Russ Miller said of Petronella’s arrest, “It wasn’t really shocking. We figured out it was coming at some point in time. There’s a lot of things that happen in the industry that happen in the industry that really aren’t secret.”
We asked, “You were hearing from former Petranella employees that they were being paid cash under the table?”
Miller answered, “Yes. Absolutely. Because they came looking for work when there’s not much and we ask, ‘How much were you making?’ and they say ‘We’re paid this cash, and this on check.’ It wasn’t a surprise.”
We went to Petronella’s office in Cathedral City to ask if employees are still being paid “under the table.”
But a man inside the office refused to unlock the door and told us, “No comment. You guys, go.”
Michael Petronella pleaded not guilty in Orange County Superior Court to all 106 felony counts.