Rand Robert Gordon and Wife Michele Louise Gordon Accused of $2 Million Fraud Scheme
A Laguna Hills couple was arraigned Thursday for a $2 million tax evasion and insurance fraud scheme, the Orange County District Attorney's office (OCDA) reports. Prosecutor Debbie Jackson had sought $2 million bail for Rand Robert Gordon, but the judge set it at $100,000 with the stipulation it be proven all funds come from legitimate sources. Michele Louise Gordon was released on her own recognizance.
Rand and Michelle Gordon owned and operated moving service companies under a variety of business names, including Gordon Moving Services Inc., Gordon Moving and Storage Inc. and GMS Solutions. On Oct. 30, 2006, 59-year-old Rand Gordon got a workers compensation insurance policy for his company with SCIF, but he failed to make quarterly payments and the policy was cancelled on Jan. 26, 2009.
He renewed his policy through SCIF on March 26, 2009, obtaining a different policy number. He is accused of knowingly making false and fraudulent statements by under-reporting his payroll to SCIF and failing to pay taxes to the Employment Development Department (EDD). Between January 2006 and December 2010, he under-reported $2.3 million to SCIF and $4.6 million to the EDD, the OCDA claims.
The Gordons allegedly kept the taxes meant to go to EDD as personal income. They are accused of owing $875,000 to SCIF, $586,000 to the Franchise Tax Board and $508,000 to EDD.
There's more: Rand Gordon is accused of telling one employee to lie about a work injury and dissuading a second from filing a workers comp claim for an injury sustained at work, the idea being to keep his loss history at a minimum to keep the insurance premium low.
The worker filed the claim anyway, leading to the SCIF discovering potential fraud. The OCDA, EDD, FTB and California Department of Insurance investigated the case.
Rand Gordon faces five felony counts of misrepresenting facts to the State Compensation Insurance Fund (SCIF), one felony count of filing a false tax return, 10 felony counts of willful failure to file or make fraudulent tax return, one felony count of filing a false tax return, two felony counts of making fraudulent statements, two felony counts of making false statements to discourage injured worker from claiming benefits, 20 felony counts of failing to file a return with intent to evade tax, and 20 felony counts of willful failure to pay tax. He also faces sentencing enhancement allegations for committing a theft exceeding $100,000.
A conviction could send him to state prison for 56 years and eight months.
Michele Gordon, 60, is charged with four felony counts of willful failure to file or make fraudulent tax returns and one felony count of filing a false tax return. The maximum sentence she faces is five years and eight months in state prison.
The California Public Utilities Commission in October 2007 cited and fined Rand Gordon $7,250 for violating regulations for movers including Maximum Rate Tariff.
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