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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Wiljo Interiors Inc. in Tulsa pays more than $200K in unpaid wages and benefits to 178 misclassified construction workers

US Department of Labor investigation finds contractor responsible as a joint employer of its subcontractor’s workers

 

WHD News Brief: [12/15/2015]
Release Number: 15-2312-DAL

 

Employer: Wiljo Interiors Inc.

Site: Riverside Indian School in Anadarko, Oklahoma.

Investigation Findings: A recent investigation by the U.S. Department of Labor’s Wage and Hour Division found Wiljo Interiors Inc. violated overtime provisions of the Fair Labor Standards Act and Contract Work Hours and Safety Standards Act; and did not pay the proper prevailing wage rates or fringe benefits required under the Davis Bacon Act.

Wiljo Interiors was sub-contracted by prime contractor, Cherokee CRC LLC, to work on a $2.9 million federally-funded construction project at the Riverside Indian School in Anadarko, Oklahoma. Wiljo Interiors then brought in an additional sub-contractor, Strong Rock Drywall LLC, of Tulsa, Oklahoma, misclassified its owner and workers as independent contractors, yet dictated what they would pay them. Strong Rock also failed to pay its employees as required by law, but their work was directed and controlled by Wiljo. Therefore, the division found there was a joint employment relationship between the two employers, holding both employers responsible, both individually and jointly, for compliance with the FLSA. The FLSA states joint employment exists where workers have an employment relationship with one employer, and the economic realities show that they are economically dependent on – and thus simultaneously employed by – another entity involved in the work.

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Houston contractor indicted for making false statements about paying prevailing wage on CMHA jobs

FOR IMMEDIATE RELEASE
Tuesday, November 17, 2015

 

A 61-count indictment was filed charging Marcus Butler, of Houston, with making multiple false statements to the United States Department of Housing and Urban Development and the United States Department of Labor while defrauding the Cuyahoga Metropolitan Housing Authority and several of his former employees, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, announced that.

The indictment alleges that Butler ran an electrical company called LB Electric of Northeast Ohio in the Cleveland area.  Butler and his company agreed to work as subcontractors on a number of CMHA construction projects, including projects at the Riverside Park, Union Square and Delaney Village properties.

Butler, as a subcontractor on the CMHA project, agreed to pay his employees a prevailing wage while they worked on these CMHA projects and further agreed to provide certified weekly payrolls to CMHA. Although Butler submitted numerous certified payrolls claiming that he paid a prevailing wage to his employees, he did not in fact make such payments to his employees and instead submitted false certified payrolls to conceal this conduct. As a result of his conduct, Butler overstated the amount of wages paid to his employees, and thus underpaid his employees, by approximately $126,514, according to the
the indictment.

Understanding the economic impact of prevailing wage

By Kevin Duncan

Wednesday, September 9, 2015

 

As a practicing economist for the last 30 years, I have spent much of that time studying the impact of prevailing-wage policies. And I was heartened to see that George Hawkins had looked at some of my recent work.

Mr. Hawkins rightly notes that too often, the debate over the merits of prevailing-wage policies has devolved into ideologically based arguments and conspiracy theories – neither of which is rooted in fact or data-driven analysis.

Peer-reviewed economists enjoy no such luxury, and that’s what has made a series of new impact analyses about prevailing wage – analyses that for the first time model the impact of these policies on broader economic factors such as job creation – so important, and so discomforting for those who oppose these standards.

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ILEPI Releases New Economic Commentary on Impact of Prevailing Wage Law Repeal

January 28, 2015

Recent commentary has just been published by the Illinois Economic Policy Institute.  See below for key findings and a copy of the full report.

Key Findings:

·        Repealing a prevailing wage law will not grow a state’s construction industry

·        Repeal of a state prevailing wage law will further detach worker productivity from worker wages, contributing to the growing problem of income inequality in America.

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West Virginia’s Prevailing Wage: Good for Business, Good for Workers

January 28, 2015 by Sean O’Leary

Construction workers hired for public projects in West Virginia must be paid a minimum “prevailing” wage and benefits level. This prevailing wage level must equal the market wage rates as determined by the West Virginia Division of Labor, and varies by geographical area within the state and by occupation.1 West Virginia’s prevailing wage law was first enacted in 1933, two years after the federal Davis-Bacon Act, which established a prevailing wage for federal construction projects. Read PDF of report.

Thirty-two states, including West Virginia, have prevailing wage laws for state-funded construction projects, while there is also a federal prevailing wage law for federally funded construction projects.2 These prevailing wage laws help ensure that government-funded construction projects are done with highly skilled workers from the community, increasing productivity and strengthening the economy with good-paying local jobs.

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El Paso City Council: Contractor’s payment on hold due to violations

By Aileen B. Flores / El Paso Times
POSTED:   12/09/2014 10:29:06 PM MST

El Paso City Council on Tuesday took action against companies that allegedly underpaid employees in the construction of Sun Metro’s bus operations and maintenance facility on the East Side.

Council voted unanimously to withhold $35,400 in payment to the contractor, Urban Associates, until an investigation is complete into one of the subcontractors, Beltran Electrical Contractors, Inc. The investigation regards possible violations of prevailing wage rates.

The contractor has 15 days to resolve the issue. If the problem is not resolved between the subcontractor and the workers, then the dispute must be submitted to arbitration, city documents show. Council also approved to report the case to the U.S. Department of Labor.

Urban Associates was awarded a $27.4 million contract in 2012. The company then subcontracted Beltran.

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US Labor Department recovers nearly $3M in back wages for workers on federally funded construction projects in New York City

Larino Masonry Inc. and owners debarred from bidding on federal contracts 

U.S. Department of Labor, Wage and Hour Division
Release Number: 14-2057-NEW, Date: Nov. 25, 2014

NEW YORK — The U.S. Department of Labor has secured $2,904,000 in back wages for laborers and mechanics who worked on federally funded construction projects in four New York City boroughs.

A federal administrative law judge approved a settlement requiring Larino Masonry Inc., based in Newark, New Jersey, to pay $1,945,000 in back wages to workers at projects in Manhattan and the Bronx for violating the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act. In a separate, but related case, Larino also agreed to an order to pay $959,000 to workers at projects in Brooklyn and Queens.

Larino admitted that it failed to pay its workers the legally required prevailing wage, fringe benefits and overtime, and submitted falsified certified payrolls to a contracting agency. In addition to paying back wages, Larino and its company president Juan Luis Larino and vice president Maria Larino have been barred from bidding on federal contracts for the next three years.

“Taxpayers should expect that federal contractors understand their obligations and comply with the law,” said Maria Rosado, director of the Wage and Hour Division’s New York City District Office, which investigated the federally funded projects. “When Larino Masonry or any other employer violates labor laws, they cheat their employees and gain an unfair advantage over employers who obey the law. We will hold them accountable.”

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Labor Bureau Recovers Lost Wages

The Oregon Bureau of Labor and Industries has secured more than $20,000 for 10 workers for a Salem contractor not paid wages to which they were entitled on a Pearl District park project.

The overtime and prevailing wage violations stem from work performed by Salem contractor Green Thumb Landscaping on The Fields Neighborhood Park in Portland’s Pearl District. Green Thumb Landscaping was a subcontractor on the public works project.

During investigation, Green Thumb initially refused to provide investigators with documents necessary to determine the accuracy of the workers’ claims. The bureau subpoenaed Green Thumb to provide it with the material, including payroll records and contact information for potentially affected employees.

The wages recovered represent the latest unlawful practice from the contracting firm. The bureau has secured more than $70,000 in unpaid wages from Green Thumb Landscaping and Maintenance, Green Thumb Yard Maintenance Inc., Green Thumb LLC and Green Thumb and Maintenance Inc. for previous wage and hour violations.

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Unionized Ironworkers Aid Non-Union Jobless

HUDSONVILLE, Mich. –  Proving once again that unionists jump to the aid of all workers – union or not – the Ironworkers are trying to find jobs for 280 non-union colleagues left high and dry without pay when a large non-union Michigan contractor suddenly shut its doors last month.  And the union hopes they’ll eventually become members, too.

The crisis arose when Lamar Construction Co., a large, long-time nonunion contractor headquartered in Hudsonville in west Michigan , abruptly closed July 9, throwing about 280 workers onto the jobless rolls.

Lamar, established in 1938, shut down after a bank cut off its credit line, MLive reported.

The company employed about 170 workers in Michigan and also operated in Kentucky and Colorado.  Lamar’s statement said it would continue operating its structural steel erection business, but nothing else.  That prompted quick offers of help for workers from the Iron Workers International Union and the anti-union Associated Builders and Contractors.

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