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Staffing execs accused of $18 million fraud

December 04 2008

Two executives and their California staffing firm face charges of conspiring to defraud California's State Compensation Insurance Fund of more than $18 million, the California Department of Insurance reported. However, the charges are disputed.

David Zahler, CEO of Staffing Services Inc., and David Tai, CFO of the company, misrepresented the types of workers they had in order to pay $18 million less in premium, according to the department.

Zahler's attorney said he will be fighting the charges. "He's well-respected in the general community at large and in the staffing community," said Ronald Ziff, the attorney representing Zahler. It's hoped that after an airing of the facts in this case that the defense will be successful, Ziff said. And plans are to enter a plea of not guilty in court on Dec. 17.

The charges resulted from a two-and-a-half year investigation, according to the Department of Insurance.

Zahler and Tai face up to 24 years in prison, $40 million in fines and $20 million in restitution, according to the Los Angeles County District Attorney's Office.

Staffing Services is based in Bellflower CA.

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