PRESS RELEASE: Ankeny Businessman, Dinesh Sethi Sentenced to 57 Months for Insurance Fraud Payroll Shuffling and Creation of Shell Corporations Caused $778,940 in Losses

U.S. Attorney’s Office
March 16, 2012

Southern District of Iowa
(515) 473-9300

Ankeny Businessman Sentenced to 57 Months for Insurance Fraud
Payroll Shuffling and Creation of Shell Corporations Caused $778,940 in Losses

DES MOINES—Dinesh Sethi, owner of DES Staffing Services, was sentenced this morning to 57 months of imprisonment for his fraudulent scheme to avoid paying $778,940 in workers compensation premiums to Travelers and Liberty Mutual Insurance companies. Chief Judge James E. Gritzner also sentenced Sethi to a five-year term of supervised release, $778,940 in restitution and a $100 crime victim fund assessment.

Sethi directed the creation of two shell companies, Staffing Professionals and KDM Staffing, and transferred DES employees to those entities to avoid the larger workers compensation premiums DES owed as a result of its accident and claims history. In addition, Sethi directed his Chief Financial Officer, Randy Stringer, to shift payroll from job classifications which had a high premium rate to job classifications which had a lower premium rate, such as clerical.

This investigation began after Sethi reported the embezzlement of employee Randy Stringer to the FBI. Randy Stringer was prosecuted, sentenced, and has served his sentence of imprisonment but remains on supervised release. Stringer provided the FBI with documentation of the payroll shifting and the shell corporations.

This case was investigated by the Federal Bureau of Investigation, with the assistance of the Special Investigations Unit at Liberty Mutual. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.