Rancho Santa Margarita, CA - Reza Mohammedi will be arraigned on an indictment tomorrow for embezzling over $350,000 in employee wages from public work contracts and filing false tax returns to hide his theft. According to the Orange County District Attorney’s office, this is the first prosecution of its kind in Orange County for fraud related to a public works contract.
Mohammedi is accused of owning and operating Southland Construction in the Counties of Orange, Los Angeles, Riverside, and San Bernardino. For the case in Orange County, he is accused of the following:
Between December 2008 and February 2012, Mohammedi is accused of entering into public works construction contracts with the Cities of Brea, Fullerton, Orange, Laguna Woods, County of Orange, the Saddleback Valley Unified School District, and the Orange County Transit Authority. The defendant is accused of hiring mostly undocumented Hispanic workers and threatening to call authorities if they reported his scheme.
Mohammedi is accused of coaching his workers on what to say if a public works inspector asked them questions regarding their wages. He is accused of systematically submitting fraudulent Certified Payroll Reports falsely stating that he was paying his workers the correct wage of $42 to $53 an hour for each project. Instead, the defendant is accused of paying his employees $13 an hour.
Between 2008 and May 2012, Mohammedi is accused of failing to accurately report employee wages and filing two false and fraudulent reports of employee wages with the Employment Development Department (EDD). The defendant is accused of failing to provide his employees with W-2 forms until 2009, and then falsely reporting their wages at the correct wage rate while paying them significantly less. Mohammedi is accused of filing false income tax reports with the Franchise Tax Board (FTB) to hide the theft. He is accused of taking tax deductions for wages he did not pay to his employees.
The Orange County District Attorney's Office investigated this case in cooperation with the Center for Contract Compliance, Contractors State License Board (CSLB), Department of Industrial Relations - Division of Labor Standard Enforcement, EDD, and FTB.
Deputy District Attorney Shaddi Kamiabipour of the Insurance Fraud Unit is prosecuting this case.