Owners of Southern California Towing Empire Arrested in $6 Million Fraud Scheme

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The brothers, who operated multiple towing companies in Los Angeles, are accused of systematically underreporting employee wages by over $13 million to avoid paying millions in required workers' compensation insurance premiums. The investigation has now expanded into a payroll tax evasion case involving the Employment Development Department.

Why it matters

This type of insurance fraud undermines the financial stability of the insurance system and shifts costs onto other policyholders. It also creates unfair competition, allowing fraudulent businesses to gain an advantage over ethical competitors while jeopardizing benefits for injured workers.

The details

Authorities allege that Mark Hassan, 46, and Ahmed Hassan, 35, reported only $3 million in payroll when the actual figure was over $16.7 million. Mark Hassan allegedly used an uninsured "shell company," Courtesy Tow, to conceal the earnings of employees from his primary business, Hadley Tow. The investigation further suggests the brothers paid employees in cash and failed to withhold standard deductions.

• The alleged scheme had been in operation before the first fraud referrals were made, but the exact duration is currently unclear.

What they’re saying

What’s next

The case moves to the Los Angeles District Attorney's Office for prosecution. Simultaneously, the Employment Development Department (EDD) is expected to pursue its own investigation into payroll tax evasion stemming from the brothers' failure to withhold employee taxes.