NORTH HOLLYWOOD : Pair Held in Alleged Embezzlement

A North Hollywood woman who allegedly stole nearly $27,000 in workers’ compensation funds has been arrested on suspicion of embezzlement, insurance fraud and grand theft, state Insurance Commissioner John Garamendi said Monday.

Brenda Sue McCornell, 36, was being held at Sybil Brand Institute on 18 felony counts, said Elena Stern, spokeswoman for the California Department of Insurance. William Whitehead, 63, of Riverside, who authorities said also participated in the scheme, was being held on the same counts at Los Angeles County Jail.

McCornell worked as a data processing supervisor at Associated Risk Services, a workers’ compensation claims processing firm in Burbank.

“She was creating fake claims and paying them out directly to Whitehead,” Stern said. During a two-week period, 21 checks totaling nearly $27,000 were cashed by Whitehead, Stern said.

The scheme was discovered when an employee of a check cashing business called Associated to receive authorization before cashing a check for Whitehead, Stern said.

The arrests are part of Garamendi’s efforts to crack down on workers’ compensation fraud, Stern said. Last month the department’s newly established workers’ compensation fraud unit arrested 10 people, she said.

McCornell and Whitehead are being held in lieu of $105,000 bail. If convicted they face maximum sentences of 10 years in prison.