Two Southern California brothers who run a network of tow companies were arrested this week on felony insurance-fraud charges after state investigators said they concealed payroll and skipped out on nearly $6 million in workers' compensation premiums. Authorities allege the pair paid some employees in cash and used shell companies to hide wages from insurers. Prosecutors say the scheme undermined benefits for injured workers and triggered a related payroll-tax inquiry.
In a statement to NBC Los Angeles, the California Department of Insurance identified the suspects as Mark Hassan, 46, of Corona Del Mar, and his brother Ahmed Hassan, 35, of Walnut. The department said investigators launched the probe after receiving multiple fraud referrals and examined several companies owned by the brothers, including Hadley Tow and California Heights Tow.
A forensic audit found the brothers reported about $3,038,164 in combined payroll to insurers, while investigators say the true payroll totaled about $16,716,657, which they say produced an estimated premium loss of $5,897,487, according to reporting by MyNewsLA. Officials also said the matter prompted the Employment Development Department to open a payroll-tax evasion inquiry.
How Investigators Say The Scheme Worked
State officials allege Mark Hassan created a shell company to obscure Hadley Tow’s payroll and that the brothers sometimes funneled wages through an uninsured business to avoid standard withholdings. The California Department of Insurance described those tactics as classic premium-fraud methods that shift costs onto honest businesses and insurers, the agency told NBC Los Angeles. In plain terms, investigators say the Hassans used paper companies and off-the-books cash to make their labor costs look a lot smaller on official forms than they were in real life.
Companies And Contracts Under Scrutiny
Procurement listings show Hadley Tow tied to Mark Hassan in Whittier through the Orange County Transportation Authority's CAMMNET portal, and corporate records list California Heights Tow under Ahmed Hassan in Walnut, per public business filings. Investigators say those records, along with payroll and billing documents, were central to the forensic audit that produced the premium-loss estimate. See the CAMMNET planholder listing and corporate filing records for details.
Legal Implications
The case is being reviewed for prosecution by the Los Angeles County District Attorney’s Office, and premium-fraud and uninsured-employer schemes can be prosecuted as felonies with stiff penalties. The DA’s office notes that workers'-compensation premium fraud and related healthcare fraud are pursued aggressively and can result in prison time, fines, and professional license consequences, and local guidance outlines how these investigations are coordinated across state agencies.
Local reporting says both men were booked, with Mark Hassan taken to the Los Angeles County Sheriff’s Inmate Reception Center and Ahmed Hassan held at the West Valley Detention Center, and prosecutors will review the department's referrals and audit before deciding on formal filings. Officials urged employers, insurers, and the public to report suspected fraud to the California Department of Insurance as the investigation continues.
