FIVE DEFENDANTS ARRAIGNED FOR COMMITTING OVER $635,000 IN TAX AND INSURANCE FRAUD AND FAILING TO PAY EMPLOYEES PREVAILING WAGE ON PUBLIC WORKS CONTRACTS

Case # 16CF0765
Date: April 13, 2016

SANTA ANA, Calif. – Five defendants were arraigned yesterday April 12, 2016, for committing over $635,000 in tax and insurance fraud and failing to pay employees prevailing wage on public works contracts. Babak Brian Abghari, 36, Newport Coast, Homayoun Harry Abghari, 57, Huntington Beach, Julio Roberto Alvarado, 47, San Pedro, Cody Lawson, 34, Long Beach, Phyllis Martinez, 51, Anaheim, are each charged with eight felony counts of taking and receiving a portion of a worker’s wage on a public work, 56 felony counts of recording a false or forged instrument, six felony counts of making a false statement to discourage an injured worker from claiming benefits, and seven felony counts of willful failure to pay taxes, with sentencing enhancement allegations for property loss over $200,000. Babak Aghari and Homayoun Aghari are also charged with three felony counts of misrepresenting facts to a workers’ compensation insurance company. If convicted, the defendants face a maximum sentence of 49 years and six months in state prison. The defendants are scheduled for a pre-trial hearing on May 12, 2016, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana.

Houmayoun Abghari and Babak Abghari are accused of owning and operating PCN3, a general contracting company that mainly conducts public works projects.

Between Jan. 1, 2000, and March 30, 2015, the defendants are accused of fraudulently paying PCN3’s employees less than the prevailing wage in cash, and keeping the extra money owed to their employees. The defendants are accused of “shorting” the victims’ hours on certified payroll reports and/or requiring their victims’ to give cash back.

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School Construction Authority General Contractor Sentenced To 96 Months In Prison For Long-Running Scheme To Deprive Workers Of The Prevailing Wage

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

Friday, April 1, 2016

Earlier today in Brooklyn federal court, Muzaffar Nadeem, the owner of SM&B Construction Co., Inc. (SM&B), was sentenced to 96 months’ imprisonment, ordered to pay more than $1.3 million in restitution to the IRS, and ordered to forfeit to the government over $7.1 million in criminal proceeds, following his convictions on May 8, 2015, after a four-week jury trial, for mail and wire fraud, structuring financial transactions, federal programs bribery, making illegal cash payments to a union official, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns, and multiple related conspiracy charges.

The convictions arose out of Nadeem’s leadership role in a long-running scheme to pay SM&B’s workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA), as SM&B was legally and contractually required to do. Nadeem’s co-conspirators Zainul Syed, Afzaal Chaudry and Irfan Muzaffar were also convicted at trial of various crimes for their participation in this scheme. Muzaffar was previously sentenced to 18 months’ imprisonment, and Chaudry was previously sentenced time served, following approximately ten months of imprisonment. Syed is awaiting sentencing. The sentencing proceedings were held before U.S. District Judge Brian M. Cogan.

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A.G. Schneiderman and Port Authority Inspector General Nestor Announce Arrest of JFK Contractor Charged With Cheating Construction Workers Out of Benefit Payments

Arbor Concrete Corp. And Its Principal Kenneth Padover Allegedly Failed To Pay $268,055.78 In Benefits To Workers For A Construction Project At JFK Airport

March 31st 2016

NEW YORK – Attorney General Eric T. Schneiderman and Michael Nestor, the Inspector General for the Port Authority of New York and New Jersey (“Port Authority”), announced the arrest of Kenneth Padover, the owner of Arbor Concrete Corp. Padover and his company face 136 felony counts of Offering a False Instrument for Filing and Falsifying Business Records and 3 misdemeanor counts of Failure to Pay Wages. Mr. Padover was arrested early this morning outside of his Dix Hills residence and is expected to be arraigned today at Queens County Criminal Courthouse. A felony complaint was filed today in court. Arbor Concrete Corp. and its principal Kenneth Padover allegedly failed to pay $268,055.78 in benefits to workers for a construction project at JFK Airport.

“My Office will not sit idly by when New York workers are cheated out of their health benefits, vacation pay and potential pension income,” said Attorney General Schneiderman. “Government contractors who fail to pay the legally required wages or benefits must be held accountable and my office will continue to prosecute employers who do not pay workers everything they are lawfully owed.”

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DEFENDANT FACES ADDITIONAL CHARGES FOR ATTEMPTING TO TAKE RESTITUTION MONEY FROM VICTIMS

*Defendant was also previously charged for conspiring to underpay employees on public works projects

Case # 16CF0632, 15CF1672

Date: March 14, 2016

SANTA ANA, Calif. – A defendant faces additional charges for attempting to take restitution money from victims in another open case. No Sung Pak, 75, Hollywood, is charged with two felony counts of attempted taking and receiving a portion of a worker’s wage on a public work, and a sentencing enhancement for crime-bail-crime. If convicted, he faces a maximum sentence of three years and 10 months in state prison for these charges. He was arraigned Friday, March 11, 2016, and is out of custody on $25,000 bail. He is scheduled for a pre-trial hearing May 26, 2016, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana.

Pak and co-defendants Michael John Ferrin, 40, San Pedro, and Scott Sung Yang, 45, Los Angeles, are also each charged with five felony counts of taking and receiving a portion of a worker’s wage on public works and one felony count of recording a false forged instrument. Pak is additionally charged with 29 felony counts of willful failure to pay tax, two felony counts of misrepresenting facts to State Compensation Insurance Fund (SCIF), two felony counts of misrepresenting facts to workers’ compensation insurance company. If convicted, Pak faces a maximum sentence of 27 years and four months in state prison for these charges, and Ferrin and Yang each face a maximum sentence of five years and four months in state prison. Ferrin and Yang are out of custody on $50,000 bail. They are scheduled to be arraigned on May 26, 2016, at 8:30 a.m. in Department C-55, Central Justice Center.

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City to deny permits to companies with wage theft convictions (TX)

POSTED: 05:22 PM MST Mar 08, 2016
UPDATED: 07:24 PM MST Mar 08, 2016

EL PASO, Texas –
The El Paso City hall is cracking down on wage theft, adding changes to an existing ordinance that will prohibit companies in some industries from conducting business within city limits if they’ve been convicted of stealing wages from employees.

The council on Tuesday voted 5 to 1 to approve the tougher changes, with Rep. Michiel Noe as the only no vote. Representatives Cortney Niland and Larry Romero were absent. Romero resigned last month but is still a holdover until his seat is filled.

Businesses with a wage theft adjudication would not qualify for certain city permits, licenses or registration. The industries affected are food handling establishments, laundries, dealers of second hand goods, vendors, contractors and flea market operators.

The current city ordinance bars companies with wage theft adjudications from winning city contracts.

More than two dozen people went to the city council meeting expressing support for the ordinance expansion. “El Paso does not need employers who are thieves,” UTEP Professor Kathy Staudt told the council.

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MnDOT contractor who shorted workers $242K is convicted of theft by swindle

$242,000 case involved co-owner of firm hired for MnDOT project.

By Paul Walsh Star Tribune
MARCH 8, 2016 – 8:09PM

A co-owner of a Twin Cities electrical contracting company has been convicted of cheating nearly two dozen employees out of a total of $242,000 in wages by paying them far less than the law required for their work on a state highway project in the north metro and elsewhere.

Laura Plzak, 54, of Loretto, was convicted in Hennepin County District Court of 16 felony counts of theft by swindle.

County Attorney Mike Freeman praised the bench verdict issued by Judge Tamara Garcia, calling it “a good decision, based on the enormous amount of evidence gathered by the FBI and the Minnesota Department of Transportation.”

Freeman said Monday that Plzak was “driven by greed, pure and simple, and it was the hardworking electricians who suffered.”

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White House Holds Meeting at Kilmer’s Request to Promote the Hiring of Local Workers on Federal Construction Projects

April 12, 2016
by RealEstateRama

Washington, D.C. – (RealEstateRama) – Representative Derek Kilmer (D-WA) joined U.S. Secretary of Labor Thomas E. Perez and Director of the White House Domestic Policy Council Celia Munoz at the White House with a local labor leader, members of Congress, and other officials for a meeting on growing opportunities for local workers that can make it easier to complete large, complex construction projects on time and under budget.

The discussion focused on the benefits of increasing the number of Project Labor Agreements (PLAs) to put more skilled local workers on federal construction projects. Kilmer highlighted the future Bangor Explosive Handling Wharf, now under construction in Kitsap County under a PLA, as an example of how the agreements can work.

PLAs have proven to be successful management tools that provide cost effective and timely completion of high-quality federal projects. In 2009, President Obama issued Executive Order 13502 to promote the use of PLAs in federal projects.

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University of Minnesota unit examines wage theft issues

By Randy Furst Star Tribune
MARCH 23, 2016 – 6:12PM

A series of articles and videos about “wage theft” appeared last month on a University of Minnesota website, describing how a large number of workers in Minnesota are routinely not paid overtime, shorted in paychecks or not paid at all.

Those practices, which violate state and federal law, are described in detail at workdayminnesota.org, which is sponsored by the Labor Education Service, a unit at the U’s Carlson School of Management.

The subject is also being discussed at Minneapolis City Hall as one of the pillars of Mayor Betsy Hodges’ Working Families Agenda. But it’s unclear so far what role the city may play in cracking down on wage theft.

The Workday articles offer a glimpse into the myriad problems of lower paid workers, often undocumented, who are sometimes reluctant to challenge employers for fear of being fired or even deported.

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LaGrange: ‘Prevailing wage’ laws need rigorous enforcement

By: LIBN Staff
March 18, 2016

It was a successful and well-attended event and, other than the people who attended, no one knew it happened.

On March 8, 2016, hundreds attended a Public Works Symposium at the Huntington Hilton organized by Laborers Local 66 and Laborers-Employers Cooperation and Education Trust. In attendance were responsible builders and contractors, union officials, lawyers and government officials. New York State Attorney General Eric Schneiderman, New York State Comptroller Tom DiNapoli and Nassau District Attorney Madeline Singas gave remarks as well as staff from Suffolk District Attorney Tom Spota’s office. The focal point of this all-day event was enforcing the prevailing wage.

Prevailing wages are the pay rates set by law for work on public work projects. This applies to all laborers, workers or mechanics employed under a public work contract. The Bureau of Public Works administers Articles 8 and 9 of the New York State Labor Laws where Article 8 covers public construction. First created by the Federal Davis-Bacon Act, all publicly funded construction contracts over a certain amount must pay workers on-site no less than the locally set prevailing wage. This standard was established to prevent public works projects from destabilizing the local construction industry and to advance workforce development as well as eliminate the age-old race to the bottom.

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California has a Right to Withhold Funds from Charter Cities that Refuse to Apply Prevailing Wages on Public Work Projects; Court Upholds SB 7

 

In recent years, a number of cities have become “charter cities,” in some cases because they believed it would “free” them from state laws requiring they pay prevailing wages on all public projects. Prevailing wages typically are what the prevalent pay is in a region.

In response, Senate Bill 7 (SB 7) passed into law, which allows the state to withhold discretionary funding from charter cities that refuse to require prevailing wage to be paid to workers on public projects.

Six charter cities (City of El Centro, City of Carlsbad, City of El Cajon, City of Fresno, City of Oceanside, and City of Vista) filed a lawsuit challenging SB 7 arguing the law is unconstitutional. In City of El Centro v. David Lanier, decided in August 2014, a judge ruled against the cities and upheld the legality of SB 7. The Court also upheld SB 922 (2011) and SB 829 (2012), which allow the state to restrict discretionary state funding to charter cities that refuse to consider adoption of Project Labor Agreements (PLAs).

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