State officials issued yet another cease and desist order in the on-going case against American Labor Alliance and its purported alternatives to workers’ comp insurance. The latest order went to Omega Community Labor Association and Compass Pilot – the alter egos that took over ALA’s accounts when it was on the verge of losing its appeal to the California Department of Insurance.
Insurance Commissioner Ricardo Lara issued the latest order finding that Omega and Compass Pilot were transacting workers’ compensation insurance as an insurer and/or broker without a license. “Specifically, [Omega and Compass Pilot] are soliciting and marketing workers’ compensation insurance coverages and issuing fraudulent insurance policies in California without authorization to do so,” the Commissioner notes in the order.
The question is will the MEWA so ordered pay any attention to the Commissioner this time and if they do why is this time different than all the previous Cease & Desist notices?
The order calls on the parties to cease and desist from acting as an insurance agent, produce, insurer or any other capacity in California. The order also calls on them to immediately cease all advertising, including internet-based advertising. As of deadline, the CompassPilot website was up and running and claiming that “Compass Pilot Workers’ Compensation Benefit (CPWCB) is a legally compliant ERISA-based benefit under Federal law.”
The move follows an earlier finding by a state administrative law judge that ALA and Omega are a single enterprise and that “the controlling persons of Respondent Omega were essentially the same controlling persons of ALA and provided services to both Respondent Omega and ALA.” Those persons are founder Marcus Asay and chief financial officer Antonio Gastelum.
Both are facing pending federal indictments on a host of charges including mail fraud, money laundering and conspiracy to commit mail fraud.Both have been ordered by the Federal Court to stop selling.
As with ALA, Omega claims to provide ERISA benefits and that it is an entity claiming exception that is exempt from state regulation. State and federal officials have found otherwise.
In light of the new cease and desist order, Workers’ Comp Executive queried the Department of Industrial Relations about stop work orders for the employers claiming coverage with Omega. Here’s the response DIR’s Erika Monteroza:
“You requested a statement to detail whether the Labor Commissioner’s Office has issued stop orders for improper workers’ compensation coverage against employers who purchased insurance policies from Omega Community Labor Union and Compass Pilot. The Labor Commissioner’s Office cannot search for employers solely by the name of their insurance carrier, as the system they use, WCIRB, requires the employer’s name or other identifier. Moreover, the database for the Bureau of Field Enforcement Unit does not have the ability to identify the reasons for issuance of stop orders against employers due to workers’ compensation violations (Labor Code section 3700).”