Compliance

Desperate Housewife Sentenced in Huge California Workers’ Comp Scam

By Business Reports

Dec. 6, 2011

A woman seeking to appear on the Bravo TV series “The Real Housewives of Orange County” instead will spend 10 years on probation for one of the largest workers’ compensation scams in California history.

Devon Lynn Kile, 46, has already spent two years in jail while her case was pending, according to the Orange County District Attorney’s Office. She recently was sentenced for joining her husband, Michael Vincent Petronella, 52, in committing $30 million in workers comp insurance premium fraud.

The couple gained notoriety in 2010 after fraud investigators raided several properties they owned and found luxury cars including a Bentley, two Ferraris, $500,000 in jewelry and $51,000 in cash. They also found an application for Kile to appear on the television show.

In April, Kile pleaded guilty to 36 felony counts, including misrepresenting facts to the State Compensation Insurance Fund and tax evasion charges. She was sentenced to 10 years probation last week.

Petronella, also known as Michael Constantine, last year was sentenced to 10 years in prison.

The couple co-owned three roofing contractor businesses.Their arrests came after a two-year investigation that began after an employee fell from a roof in 2006 and submitted a payroll stub to SCIF. But SCIF did not insure the company listed on the pay stub and notified authorities.

Investigators found the couple submitted 42 fraudulent claims and underreported tens of millions of dollars in payroll to avoid paying workers’ compensation premiums.

Meanwhile, they charged more than $2.1 million on one credit card and spent thousands of dollars “on jewelry, shoes, clothes and other personal items” at high-end designer stores, prosecutors said.

Kile was also ordered to pay at least $2.8 million in restitution.

Business Insurance is a sister publication of Workforce Management.

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