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UC Davis housing contractor gets 10 years in prison for fraud (CA)

Posted by National Alliance for Fair Contracting on

Nov. 17, 2019

DAVIS, Calif. – A 56-year-old Colorado man who fraudulently became a UC Davis housing contractor has been sentenced to 10 years in prison for insurance fraud, wage theft, perjury and grand theft, officials said. …

Thompson then secretly ran the business using the fraudulent license, officials said.

His business was able to obtain a contract with UC Davis to build student housing. During construction, he stole more than $633,000 of his employees’ wages, defrauded the California State Compensation Insurance Fund and committed perjury to conceal his fraud. In all, he caused a total loss of more than $2 million, according to the district attorney’s office.

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Hennepin County Attorney announces charges of insurance fraud and theft by swindle against former owners of Merit Drywall (MN)

Posted by National Alliance for Fair Contracting on

January 21, 2020

Today, the Hennepin County Attorney announced charges of insurance fraud and theft by swindle against the former owners of Merit Drywall. According to the criminal complaint, the two defendants, Leroy and Joyce Mehr, misclassified workers as independent contractors to avoid paying more than $300,000 in workers compensation insurance premiums.

“Wage theft, insurance fraud and worker classification fraud have no place in Minnesota. It is critical that the legal system hold those who are accused of these crimes against construction workers accountable,” said Jessica Looman, Executive Director of the Minnesota Building and Construction Trades Council, an advocate for Minnesota’s union construction industry. “We want to thank the Hennepin County Attorneys office, the Minnesota Department of Commerce Fraud Bureau, and the Building Trades Unions in our state for protecting workers and our industry.”

“The case against the former owners of Merit Drywall shows the strength of the construction community when we stand together and demand action when workers complain of wage theft and worker misclassification,” said Dan McConnell, Business Manager of the Minneapolis Building and Construction Trades Council. “Our members have lost their patience with those developers and general contractors who have profited from schemes like the one alleged here. Together, the Building Trades Unions will do everything we can to continue to assist in ensuring that those who are complicit in the exploitation of workers are held accountable.”

Minnesota’s Building Trades Unions have launched an initiative to combat wage theft, exploitation, and labor trafficking which poses a growing threat to the welfare of immigrant workers and the health of the state’s construction industry. The “Not On My Watch” or “Ya No Mas” campaign enlists union members in efforts to identify cases of abuse, and to assist exploited construction workers on Minnesota jobsites.

The Minnesota and Minneapolis Building and Construction Trades Councils will continue to support efforts to protect all Minnesota construction workers. #notonmywatch.

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Construction middlemen put workers in danger by cheating workers comp insurance providers: DA (NY)

Posted by National Alliance for Fair Contracting on

By SHAYNA JACOBS
NEW YORK DAILY NEWS
SEP 05, 2019 | 8:21 PM

A labor broker whose company pairs workers with construction gigs put endangered their employees by scamming workers compensation insurance companies in an “extensive fraud scheme,” Manhattan prosecutors said Thursday.

Labor broker Salvador Almonte, 38, and insurance broker Steven Asvazadourian, 40, denied the employees coverage partly by lying about the size of Almonte’s work force, Manhattan DA Cy Vance Jr.’s office said.

That drastically cut Almonte’s workers compensation insurance premiums, saving him millions of dollars.

But it also put the workers at risk of not being covered for on-the-job accidents or fatalities. More than a dozen of Almonte’s workers were injured and one died while he was playing games with their worker’s comp, Vance’s office said.

New York law requires nearly all employers to carry worker compensation insurance.

But not only did Almonte fail to buy the proper coverage – he declined to cooperate with the state board that decides workers’ claims, prosecutors say.

Almonte allegedly claimed to state officials his annual payroll for two carpenters and two cleaners was $70,000 per year. But in reality, he had dozens of employees, and his payroll for a typical two-week period was $110,000.

Almonte and Asvazadourian pleaded not guilty Thursday to charges including insurance fraud and scheme to defraud in Manhattan Supreme Court. They were released without bail.

Almonte is also under investigation by the IRS for failure to pay taxes.

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Stealing From Workers Is a Crime. Why Don’t More Prosecutors See It That Way?

Posted by National Alliance for Fair Contracting on
It’s time for prosecutors to shift their focus to protecting the millions of workers who are victimized by their bosses each year.

By Terri Gerstein
5/24/2018

Last week, Manhattan District Attorney Cyrus R. Vance Jr. announced the indictment of a construction company, its principals, and others for theft of over $1.7 million, as well as for insurance fraud. Here’s the interesting part: The alleged theft in this case involved stealing from workers by illegally reducing their paychecks. Among other things, Parkside Construction and its managers allegedly altered time records in order to shave workers’ hours and thereby pay less money in wages than what was owed. Historically, that kind of malfeasance would get you a lawsuit, not get you arrested.

But things are changing, although not fast enough. This case exemplifies the leadership role increasingly played by a handful of prosecutors in pursuing predatory employers. Far more state and local prosecutors should take on this work; it is the right thing to do on the merits, and is especially needed now, as the federal government is abdicating its role of protecting our country’s workers.

Voters will soon have the chance to weigh in on this issue. There are scores of district-attorney seats in play in November, as well as over 30 state-attorney general elections. Criminal-justice advocates have rightly set their sights on these races, hoping to unseat some of the district attorneys whose “tough on crime” policies tend to be limited to offenses like drug violations or traffic infractions. Yet these contests also present an opportunity to elect leaders who understand the importance of judiciously using criminal law to address serious employer abuses, like wage theft, sexual assault, and utterly avoidable workplace injuries and fatalities.

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These trends don’t affect only workers. They also harm law-abiding businesses, who struggle to compete with bottom feeders. And employers who cheat their workers often cheat the government, too, under-reporting workers for tax purposes, and defrauding workers’-compensation-insurance carriers, leaving everyone else to hold the bag.

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Some prosecutors have begun to understand this perspective. In recent years, prosecutors in places as varied as El Paso and Minneapolis have brought charges in wage-theft cases, while in Philadelphia and Boston, they have taken on grossly negligent employers whose actions led to fatalities. And even before the #MeToo movement, there were arrests of sexually assaulting bosses, like the owner of the nation’s very last Howard Johnson’s, and the co-owner of a Boulder ice-cream company.

These cases demonstrate a growing movement of law enforcement at the grassroots, and one that should be recognized and treated as a priority, especially given the potential deterrent impact. While research shows limited to no deterrence resulting from certain kinds of criminal sanctions, such as capital punishment, there is evidence that some kinds of behavior, like tax compliance, can be affected by increased criminal enforcement and sanctions. And while there are no studies to date, common sense and anecdotal evidence both strongly suggest that employer workplace violations could be deterred by the specter of criminal prosecution.

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