Sears’ siding
contractor is fined
$1,000 in insurance
fraud case

His no-contest plea is deferred
for 1 year, and he may wind
up with a clean record

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By Debra Barayuga
dbarayuga@starbulletin.com

The owner of a local siding business who pleaded no contest to workers' compensation fraud was granted a one-year deferral of his plea and fined $1,000.

Although the state was unsuccessful in seeking probation and restitution from William Lyden of Lyden Siding, prosecutors said this week they will continue to go after individuals who intentionally violate state workers' compensation laws.

"We hope this case will send the message to the insurance industry that we will prosecute people who defraud insurance companies through premium and workers' compensation fraud," said Deputy Prosecutor Randal Lee.

The Lyden case is the first workers' compensation fraud case prosecuted by the Office of the Prosecuting Attorney since the law was passed in 1996.

Lyden had pleaded no contest to first-degree theft and two counts of workers' compensation fraud.

Lyden failed to disclose to his insurance agent that his company, which installs siding and cabinets, was also doing roofing when he bought workers' compensation insurance in October 1998. His company holds the contract for Sears Roofing.

Insurance premiums for roofing are usually higher because of the risk of injury.

The fraud was uncovered after an employee fell from a roof in April 1999 and lied to doctors about how he was injured. A secretary also filed a workers' compensation claim for work-related stress she alleged was caused by having to lie about the injured employee's claim.

Randal Yoshida, Lyden's attorney, said his client agreed to change his plea to avoid losing the Sears contract and having to lay off 27 employees. "The buck stops here. He takes full responsibility."

In arguing for a deferral, he noted that Lyden is "a good corporate citizen," is active in his church and the community and is a good employer.

Lyden initially tried to blame his secretary and contended he was out of town when the accident occurred.

But he told the court Thursday that he will focus his future efforts on complying with the law. "I take full responsibility for this insurance debacle."

Lee disputed the defense's view of the case, saying Lyden deliberately deceived his insurance company on two occasions even before the employee was injured.

If Lyden complies with the conditions of his deferral, he will have a chance to erase the conviction from his record.

Chinnough Colburn, a project supervisor for Lyden who was also charged in the case, pleaded no contest earlier to criminal solicitation and was granted a deferral of his plea for one year. He was also fined $500.

According to court documents, Colburn called the employee who fell off the roof while he was en route to the emergency room and instructed him to tell the hospital he had fallen off a ladder. The employee told the truth the next day.