Owners of Southern California towing empire arrested in $6 million fraud scheme

By
Published  March 14, 2026 11:48am PDT
FOX 11

The Brief

    • Brothers Mark and Ahmed Hassan were arrested for allegedly defrauding workers’ compensation insurers of nearly $6 million in premiums.
    • The scheme involved underreporting payroll by over $13 million and using "shell companies" to hide employee wages and avoid tax withholdings.
    • The investigation has now expanded into a payroll tax evasion case involving the Employment Development Department.

LOS ANGELES - Two Southern California towing company owners are facing multiple felony counts of insurance fraud following a massive investigation into premium theft. 

Authorities allege the brothers systematically underreported employee wages to avoid paying millions of dollars in required workers' compensation insurance.

What we know:

Mark Hassan, 46, and Ahmed Hassan, 35, were arrested after a California Department of Insurance investigation revealed they reported only $3 million in payroll when the actual figure was over $16.7 million.

Mark Hassan allegedly used an uninsured "shell company," Courtesy Tow, to conceal the earnings of employees from his primary business, Hadley Tow.

The investigation further suggests the brothers paid employees in cash and failed to withhold standard deductions. 

Mark Hassan, who operated numerous towing businesses across Los Angeles—including Hadley Tow, Courtesy Tow, and California Coach Towing—held active contracts with several Southern California law enforcement agencies at the time of his arrest.

What we don't know:

It is currently unclear how long the alleged scheme had been in operation before the first fraud referrals were made. 

While the Los Angeles District Attorney’s Office is prosecuting the case, the specific trial dates and the potential maximum prison sentences for each brother have not yet been publicly disclosed.

What they're saying:

Department of Insurance experts emphasized that this type of fraud "undermines the financial stability of the insurance system" and "shifts costs onto other policyholders." 

Officials noted that such illegal actions create "unfair competition," allowing fraudulent businesses to gain an advantage over ethical competitors while simultaneously jeopardizing benefits for injured workers.

What's next:

The case moves to the Los Angeles District Attorney’s Office for prosecution. 

Simultaneously, the Employment Development Department (EDD) is expected to pursue its own investigation into payroll tax evasion stemming from the brothers' failure to withhold employee taxes.

The Source: This report is based on information from the California Department of Insurance.

Crime and Public SafetyLos Angeles