PA military contractor pleads guilty in $1.4M fraud case

Posted by National Alliance for Fair Contracting on

By Kim Slowey
August 18, 2016

Dive Brief:

  • A Pennsylvania contractor has pleaded guilty to fraud and to receiving kickbacks in connection with $1.4 million in losses at two New Jersey military facilities, according to the Times Leader.
  • Prosecutors allege that while managing military construction work, James Conway awarded his own company subcontracts for services that were never performed or only partially completed and concealed the fact that he owned the company by using an alias to sign project paperwork.
  • Authorities also maintain that Conway took more than $180,000 in kickbacks from other subcontractors in exchange for “favorable treatment.” .

Dive Insight:

A U.S. District judge ordered Conway to make full restitution, but he still faces up to $500,000 in fines and a maximum prison sentence of 30 years.

(Read More)

Feds: Buckhannon nonprofit violates Fair Labor Standards Act

Posted by National Alliance for Fair Contracting on

August 12 2016
Matt Harvey

BUCKHANNON – The U.S. Department of Labor’s Wage and Hour Division has revoked a West Virginia nonprofit’s ability to pay less than the current federal minimum wage to workers with disabilities.

The action came after federal investigations found the organization violated provisions of the Fair Labor Standards Act (FLSA) and McNamara-O’Hara Service Contract Act (SCA), according to a news release from the federal agency.

The division found that Buckhannon-Upshur Work Adjustment Center – a nonprofit community rehabilitation program – violated the FLSA when it failed to pay a valid sub-minimum wage to 12 workers with disabilities employed to do light assembly production.

(Read More)

World Trade Center contractor convicted in $1B minority-owned business fraud scheme

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By Kim Slowey
August 12, 2016

Dive Brief:

  • A Manhattan federal jury has convicted Canadian contractor DCM Erectors and its owner Larry Davis for minority- and woman-owned business fraud during the execution of almost $1 billion of steel work at the Freedom Tower and World Trade Center Transportation Hub projects, according to Reuters.
  • Prosecutors alleged that DCM and Davis enlisted two minority firms to be administrative fronts on the projects while DCM, trying to avoid paying tens of millions of dollars to minority firms, did all the work itself.
  • Davis’ lawyer said the company and Davis will appeal the verdict and that the minority firms did the work they were supposed to do on the two projects. One of the contractors, however, testified that DCM and Davis paid him $2 million to do “basically nothing,” according to The Real Deal. Davis’ sentencing is expected in November.
Dive Insight:

When Davis was first arrested in 2014, he told prosecutors that he would plead guilty but changed his mind and said he did not intentionally break the law while under contract with the Port Authority of New York and New Jersey, according to Reuters. However, prosecutors claimed that Davis falsified records to make it appear that minority contractors were performing work.

OSHA fines MA roofer $125K after company ignored fall hazard warnings

Posted by National Alliance for Fair Contracting on

By Kim Slowey
August 12, 2016

Dive Brief:

  • The Occupational Safety and Health Administration has cited Massachusetts roofing company Roof King for three willful, one repeat and nine serious violations related to falls and other hazards and fined the company $124,960.
  • According to an agency press release, Roof King’s onsite supervisory personnel ignored an OSHA inspector’s instructions as to how fall hazards could be remedied, and a subsequent inspection revealed that the company continued to put its employees at risk.
  • OSHA said that among other violations, its inspector observed Roof King’s employees working without fall protection at heights of more than 45 feet off the ground, on a lower, sloped roof and on ladders that did not extend at least 3 feet above landings.

 

Dive Insight:

“Employees should never have to risk their lives for a paycheck,” said Anthony Covello, OSHA’s area director for Essex and Middlesex counties, in a press release. He said preventable falls make up approximately 40% of all construction industry deaths and that Roof King must take action to avoid serious employee injuries or death.

SC contractors indicted in $350M DBE fraud case

Posted by National Alliance for Fair Contracting on

By Kim Slowey | August 8, 2016

Dive Brief:

  • South Carolina federal prosecutors have indicted a group of seven construction executives and associates for allegedly setting up and operating a network of sham disadvantaged and minority businesses in order to win approximately $350 million in government contracts in and out of the state since 2002, according to The State.
  • In addition to creating their own shell companies, authorities alleged that the group also enlisted existing companies owned by women, minorities, veterans and disabled veterans to assist in perpetrating their fraud.
  • If convicted, the individuals and two companies – financing firm Automatic Cash and construction consultant EEC – face sentences ranging from five to 20 years in prison, as well as fines of $250,000 to $10 million.

 

Dive Insight:

Most publicly funded projects, particularly high-dollar ones, include some level of minority participation requirements, and because many owners and general contractors maintain there is a shortage of qualified minority contractors, some firms see this as an opportunity to gain entry into a potentially lucrative niche, even if they’re not legally entitled.

(Read More)

BERGEN CONTRACTER CHARGED WITH LARCENY FOR ALLEGED WAGE FRAUD

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By Dylan Skriloff on August 4, 2016

Rockland County District Attorney Thomas P. Zugibe today announced the filing of criminal charges against Christopher Greco (DOB 07/07/65) of 260 East Crescent Avenue, Mahwah, New Jersey for allegedly defrauding nine employees out of more than $82,000 by failing to pay the mandatory prevailing wages on several public works projects for the County of Rockland.

Greco is charged with:

* Six count of Grand Larceny in the Third Degree, class “D” Felonies
* One count of Grand Larceny in the Fourth Degree, a class “E” Felony
* 48 counts of Offering a False Instrument for Filing in the First Degree, class “E” Felonies
* One count of Petit Larceny, a class “A” Misdemeanor

District Attorney Zugibe said, “Firms doing business with the County of Rockland are obligated to pay their workers legally prevailing wages, which include salary and supplemental benefits. Cases like this demonstrate that we are vigilant in uncovering such criminal conduct and that unscrupulous contractors will get caught and have to pay the consequences for cheating workers out of their rightful wages.”

(Read More)

Ashland contractor ordered to pay $117K to employees

Posted by National Alliance for Fair Contracting on

By Bill Shaner
July 29, 2016

 

BOSTON – An Ashland contractor must pay $117,000 in restitution after the Attorney General’s Office cited him for not paying employees fairly while they worked on the Acushnet Police Station.

On-Time Construction Services owner Jonatas Vicente de Brito violated the state’s wage law and failed to submit “true and accurate” payroll records, according to a release from Attorney General Maura Healey’s office Friday.

The AG’s investigators found that On-Time failed to pay three workers the prevailing wage, and that one wasn’t paid anything until the AG began its investigation a year ago. During this time, On-Time reported that its employees were paid the prevailing wage.

(Read More)

Subcontractor charged with dumping pollutants into Susquehanna River, cheating workers

Posted by National Alliance for Fair Contracting on

By Hope Stephan
on July 28, 2016 at 10:28 AM

A subcontractor hired for rehabilitation work on the George Wade Bridge in 2009 has been charged with embezzling $400,000 from union benefit and workers’ pension plans related to the work and with dumping pollutants into the river during the project.

Andrew Manganas, 59, and Panthera Painting of Canonsburg were indicted by a federal grand jury in Harrisburg on charges of embezzlement, fraud, false statements and environmental charges under the Clean Water Act related to to overall $42 million project on the bridge that carries Interstate 81 over the Susquehanna River between Cumberland and Dauphin counties.

…

Panthera was subcontracted for $9,875,000 worth of that work, to blast, resurface and paint the structural steel of the bridge.

Federal oversight required each contractor and subcontractor to submit certified payroll reports for every worker and pay period to certify the federal prevailing wage was being paid.

Manganas and Panthera are accused of engaging in a “side payroll” scheme, U.S. Attorney Peter J. Smith said in a press release. Workers received two checks – one for regular hours and a separate “per diem” check. The “per diem” check was for overtime hours worked and did not include required contributions to the workers’ union welfare benefit and individual employees’ pension plans.

The total taken through the scheme, Smith said, came to $400,000 between 2011 and 2013.

(Read More)

L&I investigation results in $66,500 in back pay for 28 workers

Posted by National Alliance for Fair Contracting on

August 19, 2016
For media information: Matthew Erlich, Public Affairs, Matthew.Erlich@lni.wa.gov, 360-902-6508.

 

Tumwater – A state investigation into a company that closed before paying employees everything they were owed on two public projects has resulted in 28 workers receiving more than $66,500 in back pay.

Eltech Electric Inc. of Seattle abruptly ceased work on the projects at the end of September 2015. Complaints filed with the Washington State Department of Labor & Industries led to an investigation that cleared the way for the workers to be paid.

The workers were involved in two public projects: construction of the Green River Community College student life center in Auburn, and repair work on the state ferry M/V Kaleetan.

The 65,000-square-foot Mel Lindbloom Student Union building opened in February. Prime contractor Walsh Construction required its subcontractors, including Eltech Electric, to have a bond. L&I was able to get money from that bond for the workers who were not fully paid when Eltech closed unexpectedly.

(Read More)

Mortenson Construction enters into PLA for $524M Milwaukee Bucks arena project

Posted by National Alliance for Fair Contracting on

by Kim Slowey
July 26, 2016

 

Dive Brief:

  • General contractor Mortenson Construction has entered into a project labor agreement (PLA) with local trade unions and workers on the new $524 million Milwaukee Bucks arena, according to the Milwaukee Business Journal.
  • The agreement establishes a prevailing wage guarantee, sets up a dispute resolution process prohibiting any activity – strikes or lockouts – that could hold up construction and requires a veteran employment program through the organization Helmets to Hardhats.

…

 

Dive Insight:

Bucks President Peter Feigen praised the deal and said the team was proud to “enlist local labor” in the safe and efficient construction of the arena. Local trade union representatives also hailed Mortenson’s willingness to use union labor and its understanding of “the role of the PLA from the quality, productivity and the safety it provides.”

(Read More)