Orange County Couple Accused of $2 Million Tax Evasion, Insurance Fraud Scheme

The Orange County District Attorney’s office has charged a married Laguna Hills couple with conducting a $2 million tax evasion and insurance fraud scheme. Rand Gordon, 59, of Laguna Hills, who with his wife allegedly owned and operated moving service companies under various business names, faces charges of misrepresenting facts to State Compensation Insurance Fund, tax evasion, and making false statements to discourage an injured worker from claiming workers’ compensation benefits. He faces sentencing enhancement allegations and, if convicted, a maximum sentence of more than 56 years in state prison.

Gordon’s wife and co-defendant Michele Louise Gordon, 60, is charged with willful failure to file or make fraudulent tax returns and filing a false tax return. If convicted, she could receive more than five years in state prison.

According to the district attorney’s office, Rand Gordon had an insurance policy for his company with State Fund but failed to make quarterly payments. The policy was cancelled in January 2009. Two months later, Gordon renewed the policy with State Fund under a different policy number. Gordon is accused of knowingly making false and fraudulent statements by underreporting his payroll to State Fund and failing to pay taxes to the Employment Development Department (EDD). Between January 2006 and December 2010, he allegedly underreported $2.3 million to State Fund and $4.6 million to EDD. The couple allegedly owes $875,000 to State Fund, $586,000 to the Franchise Tax Board (FTB), and $508,000 to EDD.

Moreover, Rand Gordon in January 2008 allegedly instructed an individual to lie about a work-related injury and in September 2009, dissuaded another individual from filing a workers’ compensation claim for a work-related injury, with the intent of keeping loss history at a minimum. The second individual filed a workers compensation claim anyway. State Fund subsequently contacted that individual regarding his workers’ compensation claim, which led to a multi-agency investigation involving the Orange County District Attorney’s Office, EDD, FTB, and the California Department of Insurance.

The defendants are scheduled for a pre-trial hearing June 27 at the Central Justice Center in Santa Ana. Deputy District Attorney Debbie Jackson of the Workers’ Compensation Insurance Fraud Unit is prosecuting the case.