Owners of major Southern California towing company arrested in alleged $6 million fraud scheme

Two brothers who built one of Southern California’s biggest towing operations are now at the center of a nearly 6 million dollar workers’ compensation fraud case. Investigators say the owners of Hadley Tow and related companies systematically hid payroll and misclassified workers, allowing them to slash insurance costs while employees handled some of the most dangerous work on the road.

Authorities allege the scheme stretched over several years and touched multiple towing brands and locations, from Whittier to other parts of Los Angeles County. The case is emerging as a test of how aggressively regulators and prosecutors will pursue premium fraud in industries where on-the-job injuries are common and insurance costs are steep.

Brothers behind major towing brands face felony charges

At the center of the case are brothers and tow company owners Mark Hassan and Ahmed Hassan, who authorities describe as operators of one of the largest towing businesses in Southern California. According to state insurance officials, Mark Hassan, 46, of Corona Del Mar, and Ahmed Hassan, 35, of Walnut were arrested on multiple counts of felony insurance fraud tied to their towing operations across the region, including Hadley Tow and California Heights Tow. The arrests followed a multi-agency investigation that focused on how the companies reported payroll and job duties to their workers’ compensation carriers.

Regulators say the brothers’ towing network handled contracts with law enforcement agencies throughout Southern California, which gave the businesses a steady flow of work from crashes, impounds, and freeway incidents. That scale, investigators argue, made any underreporting of payroll particularly significant for the workers’ compensation system, since premiums in high-risk sectors like towing are calculated directly from wage and job classification data.

State officials describe the case as a classic premium fraud operation that allegedly relied on undercounted employees, lowballed wages, and paper-thin corporate structures. By treating full-time tow operators as lower risk or lower paid than they really were, investigators say the companies cut their insurance bill while exposing workers and the broader system to greater financial risk.

How the alleged 6 million dollar scheme worked

According to a detailed state summary, the Hassan brothers are accused of hiding and misrepresenting employee wages to workers’ compensation insurance providers and of misclassifying the type of work many employees performed. Premiums in California are set in large part on payroll totals and the risk profile of each job, so assigning a tow truck driver to a lower risk category or omitting part of a paycheck can sharply reduce what a company owes.

Investigators say the brothers underreported payroll by nearly 14 million dollars across their towing entities, which allegedly produced an estimated premium loss of about 5.9 million dollars to their insurers. For both Hadley Tow and California Heights Tow, the companies reported a combined payroll of $3,038,164 to their insurance carriers, according to one investigative account, even though an audit later indicated that actual payroll was far higher. That gap between reported and real wages is at the heart of the case, since it allegedly shifted millions in risk away from the business and onto the insurance system.

Authorities also allege that the brothers used multiple corporate entities and shifting ownership records to keep the true size of their workforce obscured. Some workers were allegedly paid off the books or through side channels that did not show up in formal payroll records. Others were said to be listed in categories that made their jobs appear less hazardous than daily tow operations on freeways and surface streets.

Inside the towing empire: Hadley Tow and beyond

Hadley Tow, described in social media posts as a Whittier based towing company, sits at the center of the allegations, but the case stretches beyond a single brand. Investigators link the brothers to several towing outfits that operate across Los Angeles County and neighboring communities. The companies handle a mix of police rotation calls, private property tows, and freeway work, which together can generate a high volume of jobs and a large roster of drivers, dispatchers, and yard staff.

Corporate records and online business listings show Hadley Tow operating from a Whittier address that matches a mapped location associated with towing and impound services. Another related towing business appears in a separate business listing, underscoring the networked nature of the operations that investigators say were used to spread payroll and job classifications across multiple entities.

The towing sector in Southern California is both competitive and heavily regulated, especially for companies that hold contracts with police departments and highway authorities. Those contracts can be lucrative, but they also require proof of adequate insurance coverage. By allegedly shaving millions off their workers’ compensation premiums, the Hassan brothers are accused of gaining an unfair cost advantage in bidding for and maintaining those contracts.

Arrests, booking, and the legal path ahead

After the investigation concluded, authorities obtained warrants and arrested the brothers on multiple felony counts. According to the state’s account, Mark Hassan was booked at the Los Angeles County Sheriff Inmate Reception Center, while Ahmed Hassan was booked at the West Valley facility. Both face multiple counts of felony insurance fraud, and prosecutors have signaled that they view the alleged conduct as a serious threat to the integrity of the workers’ compensation system.

Court records referenced in coverage of the case indicate that the brothers were able to post bail after their initial arrests. A separate report on the arrests notes that two brothers who own towing companies in Los Angeles and surrounding areas were taken into custody on suspicion of concealing nearly 14 million dollars in payroll from their insurers. The charges are expected to proceed through the Los Angeles County District Attorney’s Office, which will decide how to structure the case and whether to seek any sentencing enhancements tied to the alleged scale of the fraud.

Felony insurance fraud convictions in California can carry significant prison terms, along with restitution orders that require defendants to repay insurers for unpaid premiums. In a case of this size, any restitution judgment could reach into the millions, especially if the court accepts the state’s premium loss estimate of roughly 5.9 million dollars. The brothers are also at risk of losing their ability to operate towing businesses that depend on insurance and regulatory approvals.

What investigators say about worker safety and hidden risk

Regulators have stressed that workers’ compensation fraud is not simply a bookkeeping violation, especially in a high risk trade like towing. Tow operators routinely work inches from live traffic, often at night or in bad weather, while handling disabled vehicles and heavy equipment. When a company underreports payroll or misclassifies drivers as lower risk, it can leave insurers underprepared for the true volume and severity of potential claims.

According to the California Department of Insurance, the investigation into the Hassan towing businesses relied heavily on an audit that compared reported payroll with bank records, tax filings, and other financial data. That audit, referenced in one summary of the, found that the businesses reported about 3 million dollars in payroll while actual payroll was much higher. Investigators argue that this kind of gap can lead to higher costs for honest employers, since insurers spread losses across the entire market.

State officials have framed the case as a warning to other employers that cutting corners on workers’ compensation premiums can have serious consequences. When a worker is injured and coverage is inadequate, the financial burden can shift to the worker, their family, and public safety net programs. In the towing industry, where injuries from traffic collisions, equipment failures, and physical strain are common, that risk is especially acute.

Allegations of misclassification and wage concealment

Beyond simple underreporting of payroll totals, investigators accuse the Hassan brothers of more sophisticated tactics to minimize their insurance obligations. A portion of the state’s narrative describes how some employees were allegedly labeled as clerical staff or in other lower risk categories, even though their day to day work involved field towing operations and roadside assistance.

Other workers were allegedly paid in ways that kept their wages off the official books used for insurance rating. In addition to hiding and misrepresenting employee wages, the Hassan towing businesses are accused of failing to report certain employees entirely, which would have removed them from the pool of covered workers. According to one social media post summarizing the case, both face multiple counts of felony insurance fraud tied to these practices, which prosecutors say distorted the risk picture presented to insurers.

These alleged tactics mirror patterns that regulators have seen in other high risk industries, such as construction and agriculture, where employers sometimes pay workers in cash or through shell entities to avoid payroll taxes and insurance premiums. In the Hassan case, investigators say the scale of the towing operations and the volume of concealed payroll set it apart from smaller violations.

Community contracts and public trust at stake

The case carries particular weight because the Hassan towing companies have reportedly held contracts with law enforcement agencies and local governments across Southern California. According to one detailed account of the, the brothers’ businesses have been on rotation lists for police departments that rely on private tow operators to clear crashes and impound vehicles.

When a company that holds public contracts is accused of large scale fraud, it raises questions about vetting and oversight. Cities and counties typically require proof of insurance and financial stability from their towing vendors, but they may not have the tools to detect sophisticated payroll schemes that only become visible through state level audits. Residents who see a tow truck at a crash scene generally assume that the company behind it is playing by the rules.

The allegations also touch on labor fairness. Workers who risk their safety on busy freeways expect that their employer is paying into the system that will cover them if they are injured. If payroll is hidden or misclassified, those workers may find themselves in disputes over coverage, or they may face delays and complications when they file claims. The Hassan case highlights how premium fraud can erode that basic expectation of protection.

How regulators are trying to close the gaps

State insurance officials have made clear that they view large premium fraud schemes as a priority, especially in sectors where injuries are frequent and expensive. The investigation into the Hassan towing operations involved coordination between the California Department of Insurance, local prosecutors, and other agencies that track employer compliance. That kind of joint work is becoming more common as regulators use data analytics and cross checking of tax, payroll, and insurance records to spot anomalies.

One broadcast report on the case notes that for both Hadley Tow and California Heights Tow, the reported payroll of $3,038,164 was sharply lower than figures uncovered during the audit. That kind of discrepancy is often what triggers deeper scrutiny, as insurers and regulators compare what a company tells different agencies. If a business reports one set of numbers to tax authorities and another to its insurance carrier, it can signal an attempt to game the system.