The with 24 felony counts of workers' compensation fraud and five felony counts of tax evasion were in San Mateo Superior Court on Tuesday where they each entered a plea of not guilty on all charges.
According to the San Mateo District Attorney's Office, John and Camille Applegate, owners of Hallmark Roofing, were arrested on April 19, 2012 for allegedly failing to report employee wages and not paying workers' compensation premiums from 2007-2011.
At Tuesday's brief arraignment hearing, Judge Jonathan E. Karesh asked each defendant to enter a plea and set a pretrial conference date for July 11, 2012 at 1:30 p.m.
San Mateo County District Attorney Steve Wagstaffe explained that the purpose of the July hearing is for the attorneys and the judge to review the case and see if it can be resolved early.
"Historically these cases do not proceed quickly," said Wagstaffe, adding that since all 29 charges remain in effect, the legal process will take time.
A forensic audit by the state Department of Insurance determined the Applegates did not pay hundreds of thousands of dollars in insurance premiums, allowing their company to make lower bids on projects than their competitors.
The couple also failed to file tax returns in both 2010 and 2011, according to the District Attorney’s Office. If convicted, they could each face up to five years in prison each and fines in excess of $1 million, according to the state Department of Insurance.
The couple was released on bail the day of their arrest and remain out of custody.