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‘Underground Economy’ Targeted In Massive Sting Operation

Local construction sites suspected of operating illegally were among the more than 100 targeted statewide during June's "Operation Underground."

A multi-agency sweep dubbed "Operation Underground" that took aim at suspected illegal construction sites has resulted in over 100 enforcement actions, the Contractors State License Board reported Monday.

Investigators from the Contractors State License Board, the state Department of Insurance, Employment Development Department, and county district attorneys’ offices partnered for a series of sweeps at suspected sites June 20 and 21.

Sweeps were conducted in 11 counties, including Riverside County. Two Riverside-area contractors and another in Temecula were among those slapped with citations.

In total, 104 enforcement actions were issued across the state for failure to carry workers’ compensation insurance, under-reporting the number of workers to obtain cheaper insurance premiums and to pay less payroll withholding tax, and cash payment to hide unregulated practices.

Uninsured, untaxed, unlicensed, and unregulated activity is referred to as the underground economy.

Sweeps took place in cities within Alameda, Butte, El Dorado, Kern, Los Angeles, Monterey, Orange, Riverside, San Bernardino, Santa Clara, and Yolo Counties.

The sweeps targeted 133 contractors, suspected of violating the state’s labor, employment, tax, and licensure laws. Some received stop orders for the workers’ compensation insurance violations, which means they are not allowed to use employee labor until they obtain a policy for their workers and submit proof to CSLB.

"Participants in the state’s underground economy are harmful to everyone," said CSLB Registrar Steve Sands in a released statement. "Anyone who neglects their responsibility to comply with state contracting, insurance, and payroll requirements drives up premiums. At the same time, legitimate licensed contractors struggle because illegal operators underbid them."

CSLB spokeswoman Venus Stromberg told Patch the names of the companies nabbed in the sting were not being released yet due to processing and, in some cases, ongoing investigations.

Stromberg said the CSLB urges consumers to follow these tips when hiring a contractor:

  • Hire only licensed contractors and ask to see their license and a photo ID to verify their identity. Make sure that all subcontractors also have the appropriate licenses and that the contractor has a good payment history with those supplying project materials.
  • Always check the license numbers on CSLB’s Instant License Check to make sure the licenses are in good standing, and that employees are covered by workers’ compensation insurance.
  • Don’t pay more than 10 percent or $1,000, whichever is less, as a down payment. There is an exception for about two dozen licensees who carry special bonds to protect consumers. These exceptions are noted on CSLB’s website.
  • Don’t pay in cash, and don’t let payments get ahead of the work.

More information and publications about hiring contractors are available on the CSLB website or by calling 800-321-CSLB (2752).

Cat July 10, 2012 at 06:44 PM
Sometimes even when you do all of the proper investigations on your contracters, you still might lose. I had a cement patio guy do an extremely crappy job. The judge agreed with me when I sued the guy. I won but his bonding company (Frontier Pacific) declared bankruptcy. I've been waiting for my reimbursement now for 11 years!
Diana July 10, 2012 at 06:48 PM
News flash for you Mr. Arellano, this is the era of electronics, most people now days are able to work and be able to keep abreast of whats going on via their iphone, ipad, laptop, or computer...technology is just amazing isn't it. I hope your not out there having to sweat in this heat at your job making $$$$$. LOL
Mr.A July 10, 2012 at 06:52 PM
Well theres a reason why "illegals" or just "hispanics with papers" are working and thats because they know how! Sorry you people can't do it, unless it consist of smoking the day away and drinking coffee all day... And you are right it is reality that you are racist because you don't know for a fact that they are "illegals" they can easily be legal hispanics but of course if it aint the white people on it then its a problem. Lol! Sorry they can't get paid $42 hr to smoke and drink coffee all day! But we'll shure take it for $18-$20 hr .and get it done right! Lol... What you people need to do is "get off your high horse" and stop thinking everything has to be giving to you in a silver platter. It's a jungle out here and if you wanna survive and eat then get with the program and stop expecting high salaries and less work or easy work. It really doesn't matter because were working all the jobs you guys turn down or didn't want for whatever reason and as long as my family eats you guys can keep poking your nose or whatever it is you guys do!
Diana July 10, 2012 at 07:04 PM
Tuesday, July 10th 7:23 AM, Martha I am not prejudice or ignorant nor am I a racist. I have close friends of all nationalities and ethnic backgrounds. I take offense to your name calling in your post. I'm sorry that you feel that only your postings are actually factual but those of us that live with the reality and experience of what this article refers to can also comment that experience as they see it.
Cat July 10, 2012 at 07:22 PM
You are ill informed. You state "you people can't do it" in regards to menial labor. We can & would do it if we weren't underbid by people that have the mentality "as long as my family eats." I've witnessed this 1st hand with the Jr. high & High School kids that just wanted to make money for their school trip. Under your illegal immigration post, you chastise everyone for trying to attack as a group. Now, just above, you state "you people". Do you see the contradiction here? Also pretty sure that the people that make $42 per hour don't ever write "shure".
Tonto July 10, 2012 at 07:52 PM
He may have a point. Lets replace all the city state and fed employees we can with illegals. WITH a drastic chop in all taxes :)
Cat July 10, 2012 at 08:11 PM
But I thought you wanted a solution that actually works? ;~\
Tonto July 10, 2012 at 08:19 PM
Here is how liberals spend your money - http://www.breitbart.com/Big-Government/2012/07/09/Massachusetts-Gov-Vetoes-Bill-That-Would-Ban-Purchase-of-Porn-and-Tattoos-With-Food-Stamps
Cat July 10, 2012 at 08:23 PM
@ Popeye, DEJA MOO! (The feeling that we've heard your bull before!) Your words are losing their lustre cause we've heard them soooooooo many times before! They don't even have a low impact, they pretty much have no impact on anyone here any more. I'm so disappointed in your lack of imagination. Wheres your spark? Perhaps you should change your name & come back as Sparky? Don't forget to change your personality too. Wheres the funny? Show us the funny!
Cat July 10, 2012 at 09:19 PM
L.E.R. Well the guy himself, has nothing. I went after his bonding company who then promptly declared bankruptcy. I'm not the only one either. It took this long to collect, cease any assets to distribute. They took full advantage of delays & continuences as well. The payout is down to 55% now.
Cat July 10, 2012 at 09:29 PM
Don't think anyone is disputing that L.E.S.
Steve July 10, 2012 at 10:02 PM
as usual all you talk about is nothing, low end of the gene pool voting, what no mention of melendez or hickman you are slipping. what does that have to do with contractors, you are beginning to sound like popeye Go back to your recall of hickman and your little political fetish.
Ray A July 10, 2012 at 11:34 PM
James, I recognize that you were being facetious, My point is that the blame should lie with the unethical operators who fly underneath the radar. I totally respect my Latin-American sisters and brothers and appreciate how much we owe them for our quality of life. I have total respect for working Americans, Latin, U.S., and otherwise. I think every hard working person should be fairly compensated for his or her work. Employers should obey the law, and workers should not be exploited.
Mr.A July 10, 2012 at 11:49 PM
Cat Ford then stop getting underbid?! Lol! Exactly what Im talking about..lol! You People expect More money for less work,lol! Time to get on the ball buddies! Lol! Oh, And I don't think I'm the problem Im legal, I'm working paying my taxes and going to school.. lol! But love working the jobs your people can't! Lol! Your a joke! U make me laugh! :D
Cat July 11, 2012 at 02:15 AM
Mr. A, You need to re read my post. I didn't say that I was getting under bid. I said that the high school kids that were trying to get money to go to summer camp were. Hard work is supposed to teach ethics as well as character. I don't care if you're legal as I wasn't even talking about you. One might ask why you're so defensive? If you don't like your situation then by all means better yourself. You might want to lose your attitude first cause I seriously wouldn't hire you to do my lawn. So you laugh all you want. I'll be out back at my pool. Have a good one! :~)
some guy July 11, 2012 at 02:57 AM
diana are you for real? do you even have a CL? I took the test passed the first time, trade and law, what was so hard about it? it is commen sense, if it was SO HARD maybe you shouldnt be contracting, beside i doubt you even have one, you sound like your all talk an NO ACTION
Cat July 11, 2012 at 02:57 AM
@ Popeye, Try independently wealthy & retired from working. Really - who has a landscaper & a pool boy if their unemployed? Think what you write before you pull at my apron strings again for a little attention.....mmkay?
Tonto July 11, 2012 at 03:44 AM
This is true Mr A and thats why CA is doomed ain't makin enough, payin enough taxes, etc, etc, done screwed the tax pooch didn't ya ? :)
Mr.A July 11, 2012 at 07:03 AM
Lol! I'm doing very good cat thanks! And I will do your lawn anytime! Mess it all up and throw all the trash in your pool! Lol! And your a teacher? I wonder how you treat the mexican/hispanic students????????????????
Diana July 11, 2012 at 04:34 PM
@some guy, yes I am for real I actually hold a General B contractors license, if you are not familiar with this license it is a blanket license that covers all trades of construction, framing, plumbing, electrical, roofing and so on, and of course law. Much harder to obtain then a license that covers just one trade, a General B license is what is required when you own a cell site company, meaning the construction of the cell site itself, which is just one of the family businesses that I am involved in. I trained at the Budget Contractors School in Temecula 2010, any questions, hopefully that satisfies you doubt that I am all talk and no action, but then again?
Mr.A July 11, 2012 at 05:42 PM
Well Said "Lake Elsinore Resident".. I'm done with these clowns..
some guy July 12, 2012 at 06:28 AM
@ Diana.... a general, that explains it
julie dawson July 12, 2012 at 09:58 AM
The hipocrite shoes are on your feet, you wear them every day proudly.
Martha L. Bridges July 12, 2012 at 12:52 PM
As usually the comments here on the Patch are for the most part completely off the subject of this article and have deteriorated into nasty and meaningless exchanges. The subject of this article should be of interest or concern to all as it impacts everyone. It is about Illegal or unlicensed CONTRACTORS, not Illegal IMMIGRANTS even if they are a factor for being employed by those contractors who are scamming the system.
Diana July 12, 2012 at 04:34 PM
Martha, please stop trying to control all of these forums, it is not your job to chastise anyone or point out what you consider to be nasty and meaningless, we have Toni for that.
Cat July 12, 2012 at 04:39 PM
@ Diana, that's like askin The Pope not to be Catholic! lol :~)
Diana July 12, 2012 at 05:11 PM
You are so right Cat, some peoples arrogance and superiority is just about as pointless and annoying as those that post the same thing over and over no matter what article is being discussed :)
Mr.A July 12, 2012 at 05:57 PM
Thank You Martha! :)
some guy July 14, 2012 at 05:58 PM
martha is the BOMB, keep it up girl
Cat July 14, 2012 at 06:09 PM
Did you know that you literally can not say this in an airport without having to go thru that darn security line twice?! :~)

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