The head of a scheme that sold a purported alternative to actual workers’ comp coverage is facing new legal charges. The U.S. Attorney for the Eastern District of California filed a new case against Marcus Asay (see photo) for allegedly filing false income tax returns that failed to disclose monies siphoned out of American Labor Alliance (ALA) and for disability benefit fraud.
The tax and social security charges are in addition to the pending fraud and money laundering charges alleged in a separate case that is still pending. Asay is charged in the second case along with Antonio Gastelum, who handled finances at ALA and its alter ego Omega Community Labor Union.
The program operated as CompOneUSA and CompassPilot and claimed to be an entity claiming exception from state regulation operating under the multi-employer welfare arrangement rules. The California Department of Insurance found the program illegal.
It issued hefty penalties.
The Department of Industrial Relations has still not shut down employers operating with the bogus coverage as it is required to do by law.
“Defendant Asay caused ALA to pay tens of thousands of dollars for Asay’s personal expenses, including but not limited to expenditures for Asay and his family and friends for housing, jewelry, and furniture,” the new indictment alleges. “From 2016 until 2018, Asay caused ALA to pay personal expenditures for Asay of more than $300,000.”
The indictment alleges that Asay caused the company to spend over $20,000 in 2017 for dating service websites that he used. The following year the total for dating services went to $30,000. The indictment also lists $126,000 in rental payments for Asay’s personal residence and over $40,000 withdrawn from ALA’s bank accounts via checks written out to and cashed by Asay.
The government alleges that Asay failed to report any of this as taxable income on his personal returns. The indictment alleges that Asay claimed $0 in taxable income for the 2016 calendar year.
The indictment also alleges social security fraud for concealing the income he received from ALA during a time when Asay and a dependent collected disability benefits. The indictment alleges that Asay was collecting approximately $1,700 per month in disability while working full-time for ALA and earning more than $1,000 per month. His dependent collected approximately $900 per month.