PERSONNEL FIRM CONVICTED OF DEFRAUDING STATE FUND.

Byline: P.J. Huffstutter Daily News Staff Writer

A jury found a Santa Monica-based network of temporary employment agencies guilty of insurance fraud and has awarded more than $3.2 million to the State Compensation Insurance Fund.

Citing ``clear and convincing evidence,'' the Los Angeles Superior Court verdict established that WPS Inc. had defrauded the state fund. The fund originally had filed suit to collect overdue premiums owed by WPS.

WPS is the merged companies of Western Personnel Services Inc. and General Temporaries of Norwalk Inc.

``We're very pleased with the jury's decision,'' said Charles Savage, assistant chief counsel for the state fund. ``The litigation has been going on for two years, and initially started as a simple collection action. We amended our claim to include fraud when the case went to trial.''

The state fund said it paid the companies $1.8 million in claims, but had collected only $900,000 in premiums.

``Any financial awards we receive will be returned to the (state fund's) policyholders,'' Savage said.

WPS plans to appeal the decision.

``We don't believe we've had a fair trial,'' said company President Andrew Telanoff. ``We've never had a chance to answer to these allegations because we were already in midtrial.''