A Corcoran labor contractor who cheated a workers’ compensation insurer out of millions of dollars in premiums has been sentenced to nine months in jail, the California Department of Insurance said Wednesday.
Michael Harold Kreger, 63, of Visalia, owner of Michael Kreger Contracting based in Corcoran, was also ordered to repay the insurance company $5.4 million.
Kreger pleaded no contest to three felony counts of insurance fraud with a white collar crime enhancement.
He was released on house arrest and electronic monitoring after two days in jail, according to jail records.
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Kreger operated in the underground economy until getting caught, the Department of Insurance said.
“Employers operating in the underground economy cheat their employees, their insurer, and create an unfair competitive advantage,” Insurance Commissioner Dave Jones said in a statement. “I am committed to putting a stop to the underground economy and leveling the playing field for legitimate businesses that play by the rules.”
After receiving a tip from Kreger’s insurer, the Department of Insurance had payroll records audited and found that during more than four years he intentionally underreported the payroll amount to his insurer to get lower premiums.
The Kings County District Attorney’s Office prosecuted the case.
Kreger also must serve five years probation and perform 1,500 hours of community service.