Checkmate Will Pay to End Workers’ Comp Suit

Checkmate Staffing Inc. agreed to pay more than $5 million in workers’ compensation premiums to settle a suit filed by the State Compensation Insurance Fund, a source close to the case said.

But the Orange-based temporary staffing firm remains the subject of a criminal investigation of possible workers’ comp fraud. In early November, investigators from the state’s Insurance Department and other agencies raided Checkmate’s 22 offices in California, taking boxes of files and computer records.

State Fund, which provides workers’ compensation insurance, filed a lawsuit in May against Checkmate that alleged the company owed $5.8 million in unpaid premiums for coverage provided from May 24, 2000, to June 1, 2001.

“The parties have resolved the [civil] lawsuit, and Checkmate has agreed to pay all of the premiums that State Fund believes it is owed,” fund spokesman Jim Zelinski said. The deal was reached Nov. 28, but the amount had not been revealed.

Jeffrey Simon, Checkmate’s attorney, said the company did not acknowledge any wrongdoing in reaching the settlement. Initially, Checkmate said it owed State Fund about $1.8 million.

Checkmate settled because “this was affecting their business. They wanted to put it behind them,” Simon said.

A source said Checkmate agreed to pay nearly $5.8 million to settle the civil suit.

But Checkmate still is the target of a criminal investigation that centers on whether the firm paid appropriate workers’ comp premiums for its employees, who typically handle office or light industrial work for clients including Plano, Texas-based J.C. Penney Co. and Montebello trucking service Pro Express.

“This is an ongoing investigation,” said Mike “Bud” Ingram, chief investigator of the insurance agency’s fraud division.