Wildomar Father And Son Convicted In Workers' Compensation Fraud Case

Steven Morales, 65, and Brian Todd Morales, 44, have both been found guilty in a large-scale workers' compensation fraud case.

In what the Riverside County District Attorney’s Office believes is possibly the largest workers’ compensation premium fraud case to ever go to trial in the county, a jury Friday convicted a Wildomar man of five felonies that resulted in $3.1 million in losses to the state and an insurance company.

Steven Morales, 65, was convicted of three counts of workers’ compensation fraud and one count each of tax fraud and perjury, according to Riverside County District Attorney’s Office spokesman John Hall. The jury also found him guilty of a special enhancement of taking in excess of $500,000, Hall said.

Morales is scheduled to be sentenced Oct. 15 at the Hall of Justice in Riverside and faces a potential sentence of 17 years and four months in state prison.

At the sentencing, the DA’s Office will ask the judge to order Morales to pay $3.1 million in restitution, Hall said.

Morales’ son, 44-year-old Brian Todd Morales, also of Wildomar, pled guilty in the same case in January 2010 to the three workers’ compensation fraud counts and one tax fraud count; he was sentenced in April 2010 to four years in prison and ordered to pay $3.1 million in restitution, Hall said.

The case was the result of a 13-month investigation by the Riverside County DA’s Bureau of Investigation in a partnership with the state Employment Development Department and special investigation units of the victimized insurance company.

“In 2008, state EDD became aware of possible fraud involving companies owned and operated by Steven and Brian Morales. The men formed and used various names for their businesses, such as Shelby Framing and Shelby Development, in order to hide payroll and to keep from paying workers’ compensation premiums, but it always primarily was Shelby Framing,” Hall said.

“The investigation determined that the Morales’ had been cheating more than 400 employees out of insurance premiums for unemployment insurance from 2005 through 2008,” Hall continued. “The defendants had not been reporting worker injuries while also underreporting the number of employees, or even reporting no employees, in the various company names.”

According to Hall, approximate monetary losses in the case were as follows:

--$1.7 million to the State Compensation Insurance Fund

--$1 million to the state Employment Development Department

--$300,000 to Granite State Insurance Company

D A September 22, 2012 at 04:50 PM
For once it was a person defrauding the insurance company...Normally in workers comp cases it is the insurance company defrauding, delaying denying needed services to people that have been hurt at work. they peice meal theropy and surgeries to the point that the victum of the insurance companies has no chance of recovery or returning to work. They push and deny services that if they were a doctor it would be called malpractice. But these insurance companies are protected by the state and our justice system. And if by chance the employer was grossly negligent in there actions to protect their employee, there is little or no recourse against the employer.
Anthony September 22, 2012 at 04:56 PM
CC, you are such a "smart ass" arent you! not to mention an idiot
QUEEN September 22, 2012 at 06:11 PM
They should spend equal time investigating welfare fraud and maybe the resources would be available to those hardworking American that have put blood sweat and tears in this country! Who have to be put thru ringer and humiliated for our ecomonies decline! But, if you birth a child in this country and came here illegally you will get all the benefits! As for as the 3.1 that they are fined and made to pay restitution how will they pay it if in jail?
Constant Comment September 22, 2012 at 07:33 PM
Thank you! Whats wrong sport, can't get your own blog up & running? Haha tool! }~)
concerned citizen September 22, 2012 at 10:16 PM
You people believe everything you read. The DA's office is corrupt and only believes what it wants to. This man is not guilty! You are right - the government will now be paying out of tax dollars to take care of the defendant for years to come! This story is a crock of #!#!# and the author does not know the whole truth! So unless you have gone through this yourself don't make uneducated statements about other people when you get a one sided story fueled by the corrupt district attorney and his biased investigators who are working on grants. If they don';t make someone guilty they lose their grants.
concerned citizen September 22, 2012 at 10:19 PM
You are exactly right. This is why they send white collar crimes to prison and let rapists and murders our after 5 years. The crook is the DA and the State - who make money prosecuting these types of cases rather than getting the real dangerous crooks. The investigator is paid on a grant. In other words, if she doesn't find a crime she doesn't get paid. She benefits from making crimes even when they are not there. This office is corrupt
concerned citizen September 22, 2012 at 10:20 PM
Reverend you apparently don't know the whole story. Stay tuned for the truth.
concerned citizen September 22, 2012 at 10:21 PM
America is the land of opportunity idiot! It is also a place where the government has the power to ruin your life and accuse you of lies and deciet! Apparently if you murder someone you get less time than if you fail to report paper crimes.
Teller of Truth September 23, 2012 at 11:52 PM
@ Concerned, if you don't like it you can always leave.
Teller of Truth September 23, 2012 at 11:53 PM
Seems like Anthony wants to be as smart as CC.
Teller of Truth September 23, 2012 at 11:56 PM
You ever notice how its always a relative of the arrested perp, that is always spoutin off? Well if Concerned Citizen says so, then it must be true! "This man is not guilty!"
Telling the truth September 24, 2012 at 06:22 PM
I am an honest, tax paying citizen who also doesn't trust our system or or governement. I will tell you all, that I personally know these two men. They are both dirty rotten crooks that hurt and destroyed many good hard working families and left them broke. They frauded people, stole money, and never paid employees. While doing all these, they were purchasing boats, fancy cars, room additions, taking vacations, etc. It's very sad their path of destruction that got left behind. Honestly, in this case, these men are guilty of everything they have been accused of & more.
Being Honest September 24, 2012 at 07:03 PM
Sorry...should have spelled check my above comment before posting.
Constant Comment September 24, 2012 at 07:12 PM
You might want to change your name too cause theres already a 'Teller of Truth' as posted above & believe me you wouldn't want to be confused with him! Ha! Just sayin. }~)
duane downs September 24, 2012 at 07:24 PM
The younger one is out ,searving 2 of a 4 year sentence. I'm sure the father won't get a whole lot more. I know these two assholes personally. They hurt a lot of people., my family included
The Reckoning September 25, 2012 at 03:50 AM
Dear Mr. Downs, The young one pled with the court and assumed full responsibility for every bodies actions. Some owners of the company chose to point fingers to protect their own hide. Those two stayed to work through the problems other created and will remain till things are right in the years to come. They will be able to wake up every day and look into the mirror. Don’t be naïve to those that may be close to you.
Being Honest September 25, 2012 at 04:23 AM
Just read comment posted by The Reckoning. You must be another family member or a friend to the crooks. Yes, the son tried taking the bullet for his old man. At least he was man enough to plead GUILTY, unlike his dad. NOBODY, and I mean NOBODY created their problems but them. They were writing the checks, telling the lies, and stealing the money. Borrowing money from "friends" and never paying them back. Not only were they frauding the government, insurance, employees, but they would hire illigals to work for them all week, and tell them to go pound sand when they came looking for their checks. Nice guys, right? These two rat bastards point the finger at innocent people and blame them for their own actions. It's disgusting!! To call Mr. Downs "naive" is the most ignorant comment yet. You obviously are blinded by the lies that have been told to you. Why don't you try reading the transcripts from the courtroom. I suppose those transcripts are all lies to right? Ya...sure, whatever! Karma is a bitch and these two criminals get everything they got and more. Families (including their own) have been destroyed because of these two...I sure hope it was worth it to them!
God September 25, 2012 at 05:01 AM
Sounds like the devil had your tongue. Try praying
Being Honest September 25, 2012 at 05:18 AM
Actually, I did pray and Steve was found guilty. God answered my prayer :-)
Praying Citizen September 25, 2012 at 07:08 PM
Praying for horrible things to happen to others is completely disregarding God's word and the purpose of prayer in the first place. I pray FOR people, not against them.
Being Honest September 26, 2012 at 06:45 PM
Since when did praying for the truth to be revealed & justice to be served become "completely disregarding God's will"? Stop judging me, stop judging Mr. Downs by calling him naive. Your the naive one. I have my God & he is my judge, NOT you, praying citizen. I'm sorry you don't like that fact that your relative/friend STEVE MORALES & his son BRIAN MORALES were found GUILTY in a court of law for breaking the law. I, however, along with a string of many, are GLAD that justice was served in that court room on friday. Sorry you are upset by that fact. In my world, people should go to jail for being crooks. Obviously, you have been blinded by their lies. Try speaking to some of their victims and hearing their side of the story. Maybe you won't be so quick to judge! Have a nice day and save your preaching for Steve.
The Reckoning September 27, 2012 at 04:43 AM
Other Owners of Shelby Development & Shelby Framing: Kerry Holmes, Dave Hubler, Tim Denton and Rusty Denton! Why have these guys not been held responsible for their involvement in Shelby? How come they have not manned up? I guess it is much easier to blame and point fingers than to take any responsibility. They know the truth and so does God, there will be a day of Reckoning!
The Reckoning September 27, 2012 at 04:57 AM
Teller of Truth? Funny how the story gets more twisted and twisted. They did not have any fancy cars, just some trucks. They only had one boat, one camp trailer, room addition, some quads, and one vacation the mom purchased with her retirement money. I also know that every last thing was either sold to pay for labor wages or given back to the creditor to reduce overhead, including homes. Everything was put back into the company. Since you seem to know everything, who did they defraud besided Workers Compensation or EDD? I know they paid back investors and were working on paying back Workers Compensation and EDD until the economy completely dropped. You seem to know a whole lot of nothing :) Maybe you need to get the facts from a reliable source, one that doesn't want to protect his own hide.
WWJD September 27, 2012 at 05:49 AM
Dear Sinners, If you were real Christians you wouldn't be on this website posting dirt on others. You would be in Church praying to God for forgiveness for giving into the devil's ways. Read the BIBLE and you will soon learn that God is who everyone answers to. Not you or your blasphemous prayers for horrible things to others. Look in the mirror and worry about your own sins and not others. Greed and the devil will get the best of you if you are not right with God.
Teller of Truth September 27, 2012 at 06:01 AM
Change your name. I don't want to be associated with you by any means.
Being Honest September 27, 2012 at 06:02 AM
Reckoning...how dare you take and associate those men as owners. Passing the buck...once again. I can only speak for a few and say they had absolutely nothing to do with those crimes. You'll be lucky to not have a character defamation lawsuit filed against you. As for the second part of your post, it's just simply not worth it. Not because I agree, but because you are clearly a family member and you will continue to defend them. WWJD is right. I'm out!
Teller of Truth September 27, 2012 at 06:06 AM
I never said anything about these clowns. That was "Telling the Truth" not me. So don't expect an answer from her if you can't even get our names straight. Maybe YOU need to get your facts straight dillweed.
Teller of Truth September 27, 2012 at 06:13 AM
WWJD, try and re-read it right next time. Someone said they were praying for "justice" . That is not blasphemous like you wrote. It is what was right! "Ask and you shall receive".BTW why are YOU on this web site then? Weak...
The Reckoning May 02, 2013 at 12:56 AM
So you are Being Honest?? Not ***REALLY*** Somebody has been lying to you... Take a look and tell me what you think??... http://i44.tinypic.com/35a22qb.jpg [IMG]http://i44.tinypic.com/35a22qb.jpg[/IMG] There will soon be a day of RECKONING for you man!
The Reckoning May 02, 2013 at 01:09 AM
So Kerry Holmes and Cronies... Did you not sign that paper as OWNER of SHELBY?? You're NOT an OWNER?? Come on Kerry Holmes... BE A MAN!! Step up to your CRIMES!!!!!!


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