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Couple jailed for workers' comp fraud
November 28, 2012, 05:00 AM Daily Journal Staff Report

John Robert Applegate Jr., 49, and Camile Kathryn Applegate, 50

Former Belmont spouses who own Hallmark Roofing will each spend eight months in a sheriff's work program and under house arrest for failing to pay more than $600,000 in workers' compensation insurance premiums over a five-year period.

John Robert Applegate Jr., 49, and Camile Kathryn Applegate, 50, each pleaded no contest in July to eight counts of workers' compensation premium fraud and two counts of tax evasion. Prosecutors sought seven years in prison but the court capped the maximum at three years. On Tuesday, a month after the two gave the District Attorney's Office two $100,000 checks toward restitution, Judge Mark Forcum imposed the lesser term followed by five years probation.

The Applegates must also pay back the remainder owed.

The Applegates, who divorced but remain in business together, were arrested in April after an investigation by local prosecutors and the California Department of Insurance reportedly showed their failure to accurately report employee wages between 2007 and 2011. They avoided paying approximately $630,000 and did not file tax returns in 2010 and 2011, according to authorities.

According to a statement issued by the Department of Insurance at the time, the workers' compensation fraud and payroll tax evasion gave them an unfair business advantage when bidding for job projects because they did not pay hundreds of thousands of dollars in premiums.

Both Applegates are free from custody on $50,000 bail and must surrender to begin their sentences in January.


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