Reserve deputy accused of fraud

An executive with a security and investigations company, who also served as a reserve deputy with the Los Angeles County Sheriff’s Department, was arrested Wednesday morning on suspicion of fraud after his firm allegedly failed to pay more than $9 million in workers’ compensation insurance premiums, prosecutors said.

The Los Angeles County district attorney’s office charged Ousama “Sam” Karawia, 45, president and chief executive of International Services Inc., with multiple counts of conspiracy, grand theft, making false statements and insurance fraud. He is being held in lieu of $2-million bail.

Authorities also arrested company Vice President Larry Finley, 42, who is being held in lieu of $1-million bail. A third person is being sought.

Karawia and Finley are scheduled to be arraigned Friday in downtown Los Angeles. If convicted, they each face up to 14 years in state prison.

Karawia and Finley could not be reached for comment.

Jane Robison, a spokeswoman for Dist. Atty. Steve Cooley, said the men created a shell company, International Armored Solutions Inc., to hide the true number of employees at the security firm to avoid paying higher workers’ compensation insurance premiums to the State Compensation Insurance Fund.

Authorities said Karawia told state officials that he employed about 20 workers at the new company and that it was not part of the main security firm.

Prosecutors said the firm failed to pay $9.5 million in workers’ comp premiums for its 1,500 employees.

Steve Whitmore, a spokesman for Sheriff Lee Baca, said Karawia had been relieved of duty as a reserve deputy, effective immediately.

“We have taken his weapon, his badge and his identification,” Whitmore said. “He has been suspended indefinitely and very possibly will be terminated.”

On the International Services website, Karawia said he was named as deputy director of the Sheriff’s Department’s Homeland Security Support Unit.

“Sheriff Baca recognized Mr. Karawia’s contribution to the community as a business leader dedicated to advancing security awareness and preparation in our nation’s struggle against international terrorism,” the Web statement read.

But Whitmore said the unit was disbanded two years ago.

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andrew.blankstein@ latimes.com