News and Press Releases

United States Attorney Benjamin B. Wagner
Eastern District of California

Auburn Man Pleads Guilty to Lying to Obtain Workers’ Compensation Benefits

Thursday, September 19, 2013


Docket #: 2:11-cr-182 TLN



SACRAMENTO, Calif. — Bruce Lee Cearlock, 78, of Auburn, pleaded guilty today to making false statements to obtain federal workers’ compensation benefits, United States Attorney Benjamin B. Wagner announced.

This case is the product of an investigation by the Department of Defense, Defense Criminal Investigative Service (DCIS), Sacramento; the Naval Criminal Investigative Service (NCIS); and the United States Department of Labor. Assistant United States Attorneys Kyle Reardon and Jean M. Hobler are prosecuting the case.

According to the plea agreement, Cearlock has been receiving workers’ compensation benefits under the Federal Employees’ Compensation Act (FECA) for an injury that he suffered as a civilian employee for the U.S. Navy on August 26, 1987. When filing the periodic reports required by Office of Workers’ Compensation Program (OWCP) to justify continued payments, between 2006 and 2008, Cearlock stated under penalty of perjury that he was neither self-employed nor involved in “any business enterprise.”

According to court documents, from at least 1999 until 2011, Cearlock was involved in operating “Fuse,” a bar in San Francisco. In this role, Cearlock hired and fired employees, made decisions on capital expenditures, and interacted with private citizens and public officials as the owner of Fuse. In addition, during this time period, Cearlock was the president and secretary of a privately held corporation, Alleycorp Inc., whose sole purpose was to own the Fuse nightclub. Shares in Alleycorp were split equally between Cearlock and his wife. On the basis of his statements to OWCP that he was not involved in any business enterprise, Cearlock continued to receive federal disability benefits.

Cearlock is scheduled to be sentenced by United States District Judge Troy L. Nunley on December 5, 2013. The maximum statutory penalty for each false statement to obtain federal employee’s compensation is no less than five years in prison, a $250,000 fine, and up to three years of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.



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