Painting company that defrauded workers’ comp system must pay $212,000

TUMWATER - The owner of a Spokane residential painting company will pay $212,000 in back premiums and penalties in a case involving false reporting and cash payment of wages to avoid workers' compensation premiums.

In Spokane District Court yesterday, Dale G. Koohns of Koohns Painting pleaded guilty to two counts of third-degree theft. Koohns will serve 30 days on electronic home monitoring. The guilty pleas were part of a settlement that includes an immediate payment of $55,000 to the Department of Labor & Industries (L&I) and monthly payments of $700 with the balance to be paid in full within five years.

"We received valuable help on this case from honest contractors who got tired of being underbid," said Carl Hammersburg, manager of L&I's Fraud Prevention and Compliance Program. "This settlement helps level the playing field for them."

To guarantee repayment of the debt, Koohns agreed to liens on personal assets. If the balance of $212,000 is not paid in full within five years, penalties will double and interest will accrue until paid in full.