A legal journey that started more than two years ago has finally come to an end for a pool contractor accused of defrauding more than a dozen individuals, the California Board of Equalization, the California Compensation Insurance Fund, and at least two insurance companies. In August, Michael Silverberg, owner of United States Pools in Palm Desert, Calif., pleaded guilty to several counts of grand theft, a felony. Sentenced to 15 years in state prison, he also must pay restitution to individuals he is accused of defrauding.
Silverberg was arrested in January 2013, after an 11-month investigation by the Riverside Insurance Fraud Division.
The investigation showed that Silverberg caused more than $560,000 in losses to agencies and insurers. At the time, the Riverside County district attorney accused Silverberg of reporting service technicians as independent contractors to avoid payroll taxes and workers’ compensation insurance premiums, as well as failing to report construction employees on his workers’ compensation policy.
According to Deputy District Attorney Matt Murray, Silverberg was running three different scams on clients, insurers and other pool service technicians.
Silverberg is said to have run three different scams on clients, insurers and other pool service technicians.
The first was the insurance fraud where Silverberg misclassified his employees.
The second involved his clients.
“He had access to people’s credit cards,” Murray said. “He was running unauthorized transactions on their cards.”
In the credit-card cases alone, Silverberg was accused of stealing more than $1 million from dozens of victims between 2014 and February of this year.
According to court documents, the contractor stole $275,000 from an elderly couple using their credit cards. He allegedly double-, triple- and sometimes quadruple-charged the couple. In that case he was charged with financial elder abuse and theft, among other counts.
The final scheme Silverberg was accused of took place between November 2014 and last May. He allegedly sold nonexistent pool routes to service technicians.
“He would either take a big down payment or just take the entire payment and then never provide the pool route, or would provide one that didn’t belong to him,” Murray said.
Silverberg was accused of selling more than $84,000 worth of false routes to four buyers. Court documents state that he initiated these transactions over Craigslist and used his cell phone to text the victims — despite being banned by a judge’s order from using computers, cell phones or the Internet for work.
In all, four felony cases were filed against Silverberg. Some of the charges were dropped in the deal that he took when he pleaded guilty to insurance fraud and grand theft, which covers anytime someone steals more than $950.
But Silverberg isn’t off the hook for the counts that were dismissed. “He’s still responsible for restitution,” Murray said.
Silverberg was the first contractor arrested in a large-scale move by Riverside County to identify illegal pool contractors.
At the time of the arrests, former Deputy District Attorney Michael Mayman told PSN, “It is a lot of work, but so much money is being lost in tax revenue and workers’ compensation revenue in Riverside that the honest employer is being forced out.”