Turner Construction, Bloomberg LP execs face bribery, bid-rigging charges (NY)

AUTHOR – Kim Slowey
PUBLISHED – Dec. 12, 2018

Dive Brief:

Manhattan District Attorney Cyrus Vance announced Tuesday the indictments of former Bloomberg LP and Turner Construction Co. executives, as well as subcontractors and vendors, on charges of conspiracy, bribery, bid-rigging and other offenses after they allegedly tried to steal approximately $15 million from Bloomberg during a major renovation of the financial media giant’s New York City offices.

Charges against 14 individuals and three corporations include conspiracy, grand larceny, money laundering and commercial bribery. Those indicted include Bloomberg’s former head of global construction, Anthony Guzzone, and former construction manager, Michael Campana. Also charged in the matter are Turner’s former vice president and account executive, Ronald Olson, and former project superintendent, Vito Nigro. Vance’s office said the four allegedly conspired to inflate subcontractor bids, create bogus work orders and change orders and misappropriate unused subcontractor allowances. Subcontractors Litespeed Electric Inc., Cooling Guard Mechanical Corp. and Hugh O’Kane Electric Inc. and associated individuals were charged with allegedly furthering the conspiracy by paying bribes, participating in bid-rigging, falsifying business records and laundering criminal proceeds.

Vance said “inside information” about the Bloomberg project was given to subcontractors in order to help them win contracts for the job. The defendants, he said, inflated their budgets with fake invoices and purchase orders and even filed phony applications for women-owned business status. Subcontractors allegedly gave the former Bloomberg and Turner executives cash and other incentives like vacations and free home renovations in exchange for their lucrative contracts. “Today’s indictments and guilty pleas,” Vance said, “demonstrate that if you are engaging in organized crime that blocks fair competition in Manhattan, our prosecutors will find you, turn over every stone, and shut you down.”

Dive Insight:

“Turner applauds the hard work by the District Attorney’s staff in bringing this case and appreciates the District Attorney recognizing Turner for its assistance in the investigation,” Turner spokesman and attorney Thomas J. Curran of Peckar & Abramson told Construction Dive. “Of course, Turner rejects the conduct alleged against two former employees as an absolute betrayal of Turner’s core values of integrity, which are followed by the 9,000 Turner employees who work hard, honestly and well every day.”

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Public works contractor arrested, accused of wage theft (NY)

Stephon Johnson | 8/23/2018

Authorities arrested a public contractor for allegedly skimming from his employees’ paychecks.

This week, New York State Attorney General Barbara Underwood and Port Authority Inspector General Michael Nestor announced the arrest of Marjan Kasapinov, 63, for allegedly taking more than $40,000 in wages and benefits from 28 workers employed to work on a publicly funded construction project at LaGuardia Airport. Kasapinov faces between one and four years in prison, a five-year ban from public work and payment of back wages to his employees.

Kasapinov, doing business as Paterson, N.J.-based EMLO Corp., was contracted to perform asbestos removal work on several buildings at LaGuardia Airport between March 2014 and March 2015. Kasapinov and EMLO Corp are charged with failure to pay the prevailing rate of wage or supplements, offering a false instrument for filing in the first degree and failure to secure workers’ compensation insurance-all felonies.

“Contractors that corrupt public projects and fail to pay their workers will be held accountable,” stated Underwood. “Workers deserve fair pay of the wages and benefits they’ve earned-not to be exploited by their employer. Our office will continue to work relentlessly to combat wage theft and the abuse of public dollars.”

“Companies doing business with municipalities, state agencies and authorities are legally bound to pay their employees the fair and prevailing wage,” added Michael Nestor, inspector general for the Port Authority of NY & NJ, in statement. “In this case, the defendant chose to enrich himself at the expense of his own workers. Today’s arrest will serve notice to all contractors that the Port Authority of NY & NJ will not tolerate wage fraud or any other criminal misconduct on public projects.”

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Manhattan Construction Company Misclassified and Underpaid Workers, Including Site Fatality Victim (NY)

By WorkersCompensation.com on July 27, 2018

New York, NY (WorkersCompensation.com) – Manhattan District Attorney Cyrus R. Vance, Jr., and New York City Department of Investigation (“DOI”) Commissioner Mark G. Peters announced the indictment of CRV PRECAST CONSTRUCTION, LLC (“CRV”) and six of its employees for misclassifying workers as lesser-skilled, underpaying them, and falsifying information about payroll and employees, including a worker who was killed at a company job site. The defendants are charged in a New York State Supreme Court indictment with Insurance Fraud in the Second and Third Degrees, Grand Larceny in the Third Degree, and Scheme to Defraud in the First Degree, among other charges.[1]

“Time and again, we’ve seen how wage theft is symptomatic of an overall disregard for workers’ wellbeing: On worksites where companies regularly defraud their employees, we have also seen them playing fast and loose with their workers’ lives and safety,” said District Attorney Vance. “As alleged in this case, the defendants devalued their workers’ livelihoods, underpaying them and insuring them for lower-risk work while simultaneously sending them to carry out complicated construction projects. Misclassifying workers as lesser-skilled is a common way that employers steal from their employees, and I thank our Construction Fraud Task Force partners for their continued commitment to protecting the workers who put their lives on the line every day.”

DOI Commissioner Mark G. Peters said: “These defendants stole from their workers on City construction projects, failing to pay the legally required prevailing wage and underpaying more than $400,000 in insurance premiums, according to the charges. In trying to skirt these laws for their own benefit, the defendants’ alleged conduct has instead landed them in handcuffs and facing prosecution. DOI thanks the Manhattan District Attorney’s Office for its partnership in this case and our many joint Construction Fraud Task Force investigations.”

The indictment follows a joint investigation led by the Manhattan District Attorney’s Office’s Construction Fraud Task Force and DOI, with additional assistance by the New York State Insurance Fund (“NYSIF”).

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The cost of construction and the state’s prevailing wage (NY)

By JEFF COLTIN
JUNE 4, 2018

Anybody who has seen Gov. Andrew Cuomo give a speech in the past few years knows that New York is in the midst of a building boom.

There are marquee projects like the Gov. Mario M. Cuomo Bridge over the Hudson River or the renovation of LaGuardia Airport in Queens, and there are smaller projects like street enhancements in downtown Watkins Glen or a proposed Metro-North station at Woodbury Common Premium Outlets.

These projects are mostly publicly financed and built by private contractors – and in the midst of this building boom, some state legislators are hoping to clarify what those contractors should be paid.

The state constitution says that construction workers on state-financed projects should be paid the prevailing wage – a set rate of pay and benefits. Prevailing wage rates are maintained by the state Labor Department and vary by location and job. For example, a structural ironworker in Albany County would make $30.50 an hour plus some $27 an hour in supplemental benefits on a public project, while one in New York City would make nearly $52 an hour, plus more than $70 an hour in supplemental benefits. It’s meant to prevent contractors from undercutting wages, and to ensure workers on public projects are getting paid fairly.

A bill is being considered that would expand the number of construction projects subject to the state’s prevailing wage rates. In practice, the bill is meant to clarify the definition of “public work,” legislating that even largely private projects that receive tax breaks or other government subsidies are still required to pay a prevailing wage to workers. The bill’s sponsors say that judicial rulings have caused loopholes that allow contractors to not pay full wages.

Advocates for workers say the state is paying for poor working conditions. “Too often in construction, we see a race to the bottom where unscrupulous contractors are receiving taxpayer dollars to subsidize development with little to no standards in place for the workers on these projects,” said Patrick Purcell, executive director of the Greater New York Laborers-Employers Cooperation and Education Trust, in a press release supporting the legislation.

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See Related Article: New York State Prevailing Wage Law: Defining Public Work,

Fred B. Kotler, J.D., Cornell University ILR School (March 2018)

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

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.

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.

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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Laborers on a ‘Billionaires’ Row’ Tower Cheated of Wages, D.A. Says (NY)

By James C. McKinley Jr.
May 16, 2018

The laborers were doing concrete work on the luxury Steinway Tower at 111 West 57th Street, a needlelike skyscraper set to open next year full of condominiums for some of the world’s wealthiest people. But the company employing the $25-an-hour workers, the authorities said, was cheating them out of hundreds of thousands of dollars in wages by purposely shorting their hours and failing to pay them overtime.

The Manhattan district attorney, Cyrus R. Vance Jr., said on Wednesday that the company, Parkside Construction, and its affiliates stole more than $1.7 million in wages over three years from about 520 workers at the tower and seven other high-rise buildings. The company also hid nearly $42 million in wages from state insurance officials to avoid paying millions in workers’ compensation premiums.

Many of the cheated workers were undocumented immigrants from Mexico and Ecuador, Mr. Vance said. When the workers complained, they were falsely told the money would be in their next check or were encouraged to find work elsewhere.

At a news conference announcing the arrests, Mr. Vance said the victims were especially vulnerable to exploitation because they were not in unions and did not have immigration papers. “Often it’s the very people who are tasked with building this great city who are the most vulnerable to fraud from their managers and employers,” Mr. Vance said.

Parkside Construction and its co-owners – Francesco Pugliese, 39, and Salvatore Pugliese, 46 – were charged with grand larceny, insurance fraud and scheme to defraud. Also charged in the scheme were Parkside’s construction foreman, James Lyons, 54; its payroll manager, Yenny Duarte, 42; an outside accountant, Michael Dimaggio, 58; and the owner of a Michigan payroll company, Jerry Hamling, 57. The Pugliese family’s companies made more than $100 million off the masonry and concrete contracts for the eight buildings.

“This was a business model for these defendants,” Mr. Vance said.

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ILR Impact Brief – New York State Prevailing Wage Law: Defining Public Work

Publication Date 3-8-2018
Fred B. Kotler, Cornell University ILR School

Abstract

New York’s prevailing wage standards require that contractors on state funded construction projects pay their workers no less than wage and benefit levels “prevailing” within the local construction market.

Much has changed since the prevailing wage was enacted by statute in 1897 and written into New York’s Constitution in 1938. “Public works” projects then typically meant construction of public facilities, funded by public money, for public use. Today public resources are leveraged creatively to attract private capital for economic development.

The commingling of the various forms of public support with private funding has blurred the definition or boundaries of “public work.”

Sixteen other states have statutes that more broadly apply the standards to include loans, tax incentives, and other forms of public support to private projects. New York is among ten other states that enable private developers to accept public money without paying prevailing wages and benefits.

This report examines the taxpayer interest in redefining “public work” to include both traditionally funded public works projects and private, economic development projects funded at least in part by public assets.

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(Full PDF of Study)

DA holds labor law conference

By: Adina Genn
March 23, 2018

Labor leaders, elected officials and representatives from county, state and federal agencies gathered this week for a labor law conference at The Morrelly Center in Bethpage, hosted by Nassau County District Attorney Madeline Singas.

The conference, the district attorney’s second, aimed to share information and discuss trends toward protecting employees and taxpayers.

“When unscrupulous employers cheat in one aspect, they often cheat in everything,” Singas said in a statement. “It starts with stealing hard earned wages from their employees, and then evolves into submitting false payroll records, false tax returns and cheating the unemployment insurance system.”

In 2017, the Nassau DA began working with district attorney offices in New York City and Westchester, along with the state Attorney General’s office and the U.S. Department of Labor to launch a wage-theft investigation within the construction industry. This year the Nassau DA’s wage theft saw 30 cases related to undocumented workers who aren’t being paid, up from two last year. And at an event that the DA’s office organized with Univision generated new cases.

Attendees at the 2018 conference included Nassau County Executive Laura Curran, Westchester County District Attorney Anthony Scarpino and Putnam County District Attorney Robert Tendy as well as representatives from the Gov. Andrew Cuomo’s office; Attorney General Eric Schneiderman’s office; the New York State Labor Department; Occupational Safety and Health Administration; Queens County District Attorney’s Office; the Law Office of Archer, Byington, Glennon & Levine; and Maryhaven Center of Hope.

(Read More)

Albany retrieves $35M in wages stolen from N.Y. workers

BY GLENN BLAIN
NEW YORK DAILY NEWS
Tuesday, April 3, 2018, 8:30 PM

ALBANY – State investigators recovered more than $35.3 million in stolen wages in 2017 – a boost of over $1.3 million from the year before, officials announced Tuesday.

The wages were returned to 36,446 workers across New York, including 15,577 in the city, who were not properly compensated for their time on the job.

“We have zero tolerance for those who seek to rob employees out of an honest day’s pay for an honest day’s work,” Gov. Cuomo said.

Since taking office in 2011, Cuomo has made wage theft a priority for the state Labor Department and other agencies. With the 2017 figures, the state has now returned $258.4 million to 215,335 workers.

The state’s just-approved 2018-19 budget included $1 million to fund the Labor Department’s efforts to investigate wage theft, Cuomo added.

Among the most common forms of wage theft are failure to pay overtime, failure to pay the correct prevailing wage and the charging of workers for required uniforms and equipment.

State officials urged workers who wish to file a wage theft complaint to call (888) 4-NYSDOL.

(See Article)

Construction Execs Plead Guilty To Defrauding Workers, DA Says

More than two dozen construction workers were defrauded out of an estimated $95,000 in wages.

By Brendan Krisel, Patch National Staff
Apr 5, 2018 11:58 am ET

MIDTOWN MANHATTAN, NY – Two construction company executives pleaded guilty to defrauding workers out of wages for a Midtown construction job, New York District Attorney Cyrus Vance, Jr., announced Thursday.

Nikitas Nikolis, of Queens, and Anthony Caggiano, of Long Island, will be forced to pay restitution to workers hired by City Metro Corp between June 2015 and April 2017, prosecutors said. Nikolis, 61, and Caggiano, 54, pleaded guilty to first-degree scheme to defraud on Thursday, prosecutors said.

Between June 2015 and April 2017 Nikolis and Caggiano stole an estimated $95,000 from more than two dozen workers hired by City Metro Corp for a Midtown Manhattan construction job, prosecutors said. The two construction executives would divert proceeds from the job, intentionally failing to keep the workers’ wages in reserve, prosecutors said. As a result, some workers were paid only a portion of their earned wages and some workers weren’t paid at all, prosecutors said.

The workers were hired by City Metro Corp to perform a concrete installation project at a Midtown hotel under construction, prosecutors said.

“Whether it’s withholding overtime, misclassifying workers, or not paying them outright, wage theft is a crime that will be prosecuted aggressively in Manhattan,” District Attorney Vance said in a statement. “While wage theft is intolerable in any industry, it is particularly egregious in cases like these, where laborers who put their physical safety on the line are not even paid for their work.”

(See Article)