Southern California Towing Business Owners Charged in $6 Million Fraud Case
Brothers Arrested in $6 Million Workers’ Compensation Fraud Case
LOS ANGELES – Two towing company owners in Southern California, Mark Hassan, 46, and Ahmed Hassan, 35, have been arrested on multiple felony counts of insurance fraud, allegedly defrauding workers’ compensation insurers of nearly $6 million through a scheme that involved significant underreporting of payroll.
Authorities claim that the Hassan brothers systematically reported only $3 million in payroll, while their actual payroll exceeded $16.7 million. They allegedly engaged in fraudulent practices, including the use of a "shell company," Courtesy Tow, to obscure employee earnings and evade millions in required insurance premiums.
The investigation led by the California Department of Insurance revealed that the brothers paid employees in cash and neglected to withhold standard taxes. Mark Hassan was known to operate several towing businesses across Los Angeles, including Hadley Tow and California Coach Towing, and had active contracts with various Southern California law enforcement agencies at the time of his arrest.
The case has expanded into a payroll tax evasion inquiry involving the Employment Development Department (EDD). While the Los Angeles District Attorney’s Office is handling the prosecution, specific details about trial dates and potential sentences for the brothers remain undisclosed.
Department of Insurance officials have emphasized the broader implications of such fraud, stating that it "undermines the financial stability of the insurance system" and shifts costs onto legitimate policyholders. They highlighted that these illegal activities not only create "unfair competition" but also threaten benefits intended for injured workers.
As the legal process unfolds, the EDD is expected to continue its investigation into the brothers’ failure to comply with tax withholding requirements.
