SACRAMENTO, Calif. (KTXL) — Three people were arraigned Monday on multiple felony counts of insurance fraud after a joint investigation, according to the California Department of Insurance. 

According to a news release, Troy Williams, 49, of Angels Camp, Nanci Morman, 68, of Somerset, and John Allison, 63, of Rocklin, allegedly conspired to illegally lower their company’s workers’ compensation insurance permits and defraud the state’s compensation insurance fund of over $127,000.

The investigation was conducted by the state’s insurance department and the El Dorado County District Attorney’s Office. After their investigation, it was revealed that the trio defrauded the state fund of $127,795 by not paying the correct amount of premium.

According to the insurance department, Williams owned Archer Building Company, a framing business, since 2001. The company reported carpentry payroll between 2013 and 2016, however, its work-related claims costs increased in 2016, leading to an increase in worker’s compensation insurance rates. 

In the investigation, the insurance department said Allison, who was an employee at Archer Building Company, created Allison Development, which was used by the former to divert its carpentry payroll to avoid paying workers’ compensation claims between 2016 and 2020. 

In 2020, Allison’s Development’s workers’ compensation policy was canceled and the employees transferred back to Archer Building Company, according to the insurance department. 

Morman was the bookkeeper and point of contact for insurance audits for both companies, the insurance department said.    

According to the insurance department, Williams and Morman turned themselves in at the El Dorado County Jail on March 10. Allison self-surrendered to El Dorado County Jail four days later. 

The trio is scheduled to appear in court on May 26 and the El Dorado County District Attorney’s Office is prosecuting the case.