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LOS ANGELES — California insurance officials say two sisters who run two apparel subcontractors have been arrested along with their accountant in connection with a scheme to underreport hundreds of employees and nearly $79 million in payroll to insurers and state agencies.

Insurance Commissioner Dave Jones said Thursday that 57-year-old Sung Hyun Kim and her sister, 59-year-old Caroline Choi, could face 18 felony counts of workers’ compensation insurance fraud. Also accused is 71-year-old Jae Kim, a certified public accountant employed by the women.

The sisters are CEOs of the sewing companies Meriko Inc. and SF Apparel Inc. The firms are subcontracted by Southern California-based True Religion Brand Jeans, which is not suspected of any wrongdoing.

Jones says the fraud involved fabricating payroll records.

Phone numbers for both companies have been disconnected.

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