A.G. Schneiderman Announces Guilty Pleas Of Contractors Who Underpaid Workers On NYC School Construction Authority Project

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Brooklyn Employers Agree To Pay $100K In Restitution To Six Workers; Employers Banned From New York State Public Construction Work For Five Years. Schneiderman: Workers ...

New York, NY - February 26, 2014 - Attorney General Eric T. Schneiderman today announced the guilty pleas and sentencing of Universal Steel Fabricators, Inc. and its owners, Harvinder Singh Paul and Emilio Franza, for failing to pay prevailing wages to ironworkers on a public works construction project at a New York City public school. The company and its owners have reimbursed six workers more than $115,000, for wages they are legally due. The defendants pleaded guilty to various charges and were sentenced to a conditional discharge. The defendants will also be prevented from bidding on New York State public work projects, or debarred, for a period of five years. 
 
“This construction company and its owners abused public funds to underpay hardworking employees and falsify payroll records,” Attorney General Schneiderman said.  “My office will continue to prosecute employers who show blatant disregard for the law, for the state’s taxpayers and for their own employees. Further, we will bar these bad actors from public construction projects going forward.”
 
According to court documents and statements made on the record, Universal Steel, located at 90 Junius Street in Brooklyn, performed work from March to June 2012 as a subcontractor on a New York City School Construction Authority project at Public School 41 in Queens. Both New York State Labor Law and the contract’s terms required the defendants to pay prevailing wages, consisting of an hourly pay rate plus supplemental benefits, to all workers on the job. 
 
New York labor laws and the School Construction Authority contracts required the defendants to submit certified weekly payroll reports to New York City’s School Construction Authority, with the names and addresses of all the workers on the project, and to certify that they had paid the workers the prevailing wages for every hour worked. To hide their scheme and take money that rightfully belonged to the workers, the defendants submitted false certified weekly payroll reports stating that they had paid all their workers the correct wages. They also failed to report several employees, who were not paid the prevailing wage. By filing false certified payroll reports, the defendants induced the School Construction Authority to pay them more than $100,000 that the city agency had the right to withhold on behalf of the workers. 
 
New York City Department of Investigation Commissioner Mark G. Peters said, “New York City has zero tolerance for vendors who steal wages from their workers. DOI was pleased to work with the state Attorney General to expose and stop this pernicious fraud.” 
 
Paul, who lives in Princeton, N.J., and Franza, of Woodhaven, Queens, were arrested on October 16, 2013. They and Universal Steel Fabricators, Inc., were charged in a felony complaint with Grand Larceny in the Second Degree, under Penal Law §155.40(1), a class C felony; Violation of Labor Law §220(3)(d)(i)(3), a class D felony; Offering a False Instrument for Filing in the First Degree, under Penal Law §175.35, a class E felony; Falsifying Business Records in the First Degree, under Penal Law §175.10, a class E felony; Scheme to Defraud, under Penal Law §190.65(1)(b), a class E felony; and Violation of Labor Law §198-a(1), an unclassified misdemeanor. 
 
Universal Steel Fabricators pleaded guilty to one count of Grand Larceny in the Second Degree and Violation of Labor Law §220(3)(d)(i)(3); Franza pleaded guilty to one count of Violation of Labor Law §220(3)(d)(i)(1), a class A misdemeanor; and Paul pleaded guilty to one count of Violation of Labor Law §198-a(1), a class A misdemeanor. 
 
The defendants admitted that they were required to pay prevailing wages to their workers at PS 41 because they had performed construction work on other government projects. They further admitted that, knowing this, they paid their workers between $13 and $16 per hour, instead of the required rates of $57.64 per hour for mason tenders and $79.72 per hour for ironworkers. 
 
New York’s prevailing wage law seeks to ensure that government contractors pay wages that are comparable to the local norms for a given trade. For construction work performed for public agencies, the law requires payment of hourly rates well above the state minimum wage ($8 per hour), as well as benefits. Under Labor Law §220(3), any contractor or subcontractor that fails to pay prevailing wages to workers on a public works construction project may be prosecuted, with the severity of the charges depending on the aggregate amount stolen from the workers.
 
The Honorable Dorothy Chin-Brandt of Queens Supreme Court sentenced all three defendants to a conditional discharge and ordered Franza and Paul to pay $115,508.57 in restitution for the workers they underpaid. 
 
The New York City School Construction Authority Office of the Inspector General investigated the case and referred the matter to the Attorney General. SCA OIG Investigators Nick Scicutella and Charles Shevlin were the lead investigators. First Assistant Inspector General Gerard McEnroe leads the unit responsible for investigating. The Attorney General thanks the New York City School Construction Authority Office of the Inspector General, which is overseen by the New York City Department of Investigation, for its investigation and assistance in the prosecution. 
 
The case was investigated by Investigators Nick Scicutella and Charles Shevlin of the New York City School Construction Authority Office of the Inspector General, which is overseen by First Assistant Inspector General Gerard McEnroe. The Attorney General thanks the New York City School Construction Authority Office of the Inspector General, which is overseen by the New York City Department of Investigation, for its investigation and assistance in the prosecution. 
 
Office of the Attorney General Investigators Andrew Scala and Sixto Santiago participated in the investigation, under the supervision of Supervising Investigator Luis Carter and Deputy Chief Vito Spano.
 
The case was prosecuted by Assistant Attorney General Meredith McGowan and Section Chief Felice Sontupe of the Attorney General’s Labor bureau. The bureau chief is Terri Gerstein, and the bureau is overseen by Executive Deputy Attorney General for Social Justice, Alvin Bragg. 
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