Joint Initiative Between Attorney General And NYC Department Of Investigation Combating Wage Theft At Public Works Projects In NYC Has Resulted In Seven Guilty Pleas And Almost $1.5 Million In Restitution For Workers
(Long Island, NY) Attorney General Eric T. Schneiderman today announced that New Paltz-based construction company Lalo Drywall, Inc. and its owner Sergio Raymundo, 28, were sentenced in Manhattan Supreme Court after a conviction related to wage theft for underpaying workers at a mixed-use, commercial, and low-income residential project in Harlem.
Raymundo and Lalo Drywall, Inc. admitted to cheating eight workers at a Harlem housing project out of approximately $800,000 in wages during a 17-month period. The defendants attempted to conceal the underpayments by signing false checks drawn on the company’s account indicating that employees on the job were paid properly under the law. However, those checks were never actually given to the workers.
“Wage theft is a crime – one that frequently involves companies exploiting low and middle income workers for their own gain,” said Attorney General Schneiderman. “My office will continue to aggressively prosecute those who commit wage theft and ensure that workers received the compensation they have earned.”
“Contractors who cheat workers out of their rightful pay must be held accountable and DOI, along with the Attorney General and our partner agencies, will continue to aggressively seek out and expose the individuals and businesses who attempt to line their pockets with the hard-earned wages of workers,” said New York City Department of Investigation Commissioner Mark G. Peters.
This conviction marks the seventh plea stemming from the April 8, 2015 arrests of seven subcontractors as part of a joint initiative by Attorney General Eric T. Schneiderman and New York City Department of Investigation Commissioner Mark G. Peters to combat wage theft at public works projects in New York City. The other six arrests have all led to guilty pleas, recovering nearly $1.5 million for underpaid workers, and resulting in the debarment of the subcontractors, which prevents them from bidding on or being awarded public works contracts in New York State for a period of five (5) years.
Today’s sentencing follows the March 18, 2016 guilty pleas in this case. Specifically, Sergio Raymundo pleaded guilty to one count of Falsifying Business Records in the First Degree under New York State’s Penal Law, a class E felony, as well as to one count of Failure to Pay Wages under New York State’s Labor Law, an unclassified misdemeanor. Lalo Drywall, Inc. pleaded guilty to one count of Falsifying Business Records in the First Degree, a class E felony. Pursuant to the plea agreement, both defendants were required to pay $793,509.60 in restitution and $83,143.76 in unpaid unemployment contributions due to the New York State Department of Labor – Unemployment Division.
On the date of plea, Sergio Raymundo and Lalo Drywall, Inc. paid $300,000 to the OAG for restitution for workers and $50,000 for unpaid unemployment insurance contributions. Today, Raymundo and Lalo paid an additional $200,000 to the OAG for restitution and an additional $10,000 for unpaid unemployment insurance contributions. Under the plea agreement, Raymundo must make monthly payments of the remaining $293,509.60 in restitution and $24,640.96 in unemployment insurance contributions. Raymundo was also sentenced to three (3) years probation. Lalo was sentenced to a conditional discharge and is jointly responsible for payment of the remaining restitution and unemployment insurance contributions. In addition, both Raymundo and Lalo are barred from bidding on or being awarded public works contracts in New York State for a period of five (5) years from sentencing.
The prior six convictions involved the following individuals and companies: Tariq Mahmood, 57, and his company Peral General Contractor LLC; Mohammad Chatha, 57, and his company M.B. Din Construction, Inc.; Shamas Mian, 52, and his company United Construction Field, Inc.; Jagdish Singh, 58, and his company Navico B & S Construction Corp.; and Baldev Singh, 40, and Avtar Singh, 37.
The Attorney General thanks the Inspectors General for the New York City Department of Investigation. This case was investigated by Deputy Inspector General David Jordan and Assistant Inspector General Ondie Frederick under the supervision of Inspector General Jessica Heegan.
The Attorney General also thanks the Inspectors General for the School Construction Authority and their staffs for their assistance on the other five investigations and prosecutions. Those cases were investigated by William O’Brien and Lee Callier of the School Construction Authority, Office of the Inspector General under the supervision of First Assistant Inspector General Gerard McEnroe and Inspector General Maria Mostajo.
The Attorney General also thanks the Inspectors General for the New York City Housing Authority for their assistance on this investigation. The case was investigated by Special Investigator Robert Diienno and Edward Bradley, Deputy Inspector General under the supervision of Inspector General Ralph Ianuzzi.
The Department of Investigation’s effort to combat prevailing wage violations was overseen by Senior Associate Commissioner Michael Carroll and Associate Commissioner William Jorgenson.
Attorney General investigators working on these cases were Elsa Rojas, Sixto Santiago, Edward Ortiz, Ismael Hernandez, Brian Metz, Michael Leahy, Naomi Jimenez, Michael Yun and Senior Investigators Salvatore Ventola and Lawrence Riccio with assistance by Supervising Investigators John M. Sullivan and Michael Ward. The investigation was conducted under the supervision of Supervising Investigator Luis Carter, under the direction of Deputy Chief Investigator John McManus. The Attorney General’s Investigations Bureau is led by Chief Investigator Dominic Zarrella.
The criminal cases were prosecuted by Assistant Attorney General Matthew Ross, Assistant Attorney Benjamin Holt, and Assistant Attorney General Richard Balletta, the Attorney General Labor Bureau’s Criminal Section Chief, with assistance from Stephanie Swenton, the Deputy Bureau Chief of the Criminal Enforcement and Financial Crimes Bureau.
The Labor Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg and Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice.
