NJ Construction Co. Indicted For Fraud in NY

Albany, NY (WorkersCompensation.com) - A New Jersey-based construction company and six of its employees have been indicted on charges for misclassifying at least four of their employees as concrete laborers instead of ironworkers in order to pay them less in both wages and insurance premiums, according to the Manhattan District Attorney’s Office last week. The company also misclassified a worker that had been killed while working at a company job site.

Allegedly, CRV Precast Construction LLC took $40,000 in wages from their workers, and also took money from New York State’s Insurance Fund (NSIF). CRV was charged with falsifying the payroll and misclassifying employees, as laborers are insured at a much lower rate, according to the indictment.

Per authorities, when workers complained about what was going on, they were told by management that they could quit. By the company underreporting their expected aggregate payroll from 2015-2016, they underpaid NYSIF roughly $380,000 for the insurance coverage it received.

CRV was hired as a subcontractor on a project in 2016, which was federally-funded and involved the renovation of Draper Hall, an old medical dorm. The building was under construction to become an affordable housing complex for senior citizens.

In a press release, District Attorney Cyrus R. Vance, Jr. stated,

“Time, and again, we’ve seen how wage theft is symptomatic of an overall disregard for (a) worker’s wellbeing. On worksites where companies regularly defraud their employees, we have also seen them playing fast and loose with their workers’ lives and safety. The defendants devalued their workers’ livelihoods, underpaying them and inuring 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 partners for their continued commitment to protect the workers who put their lives on the line every day.” 

This indictment comes after an investigation that initiated in February by the Manhattan District Attorney’s Office’s Construction Fraud Task Force, the New York City Department of Investigation, and the state Insurance Fund.

A spokesperson for the Manhattan District Attorney’s Office told WorkersCompensation.com that they can only speak about the indictment that has come out of their office, and not about any of the other Boroughs that are involved. They noted that from their prosecution alone the charges are punishable of a maximum of 15 years in prison. 

A worker by the name of Elizandro Ramos was allegedly misrepresented to the New York State Insurance Fund. Back in November 2016, Ramos fell to his death while he worked on a construction site in Queens for CRV. This had been the second death for the contractor, and the company had been fined before by the Occupational Safety and Health Administration for the death of a worker who, while working in extreme heat, collapsed on a job site in Brooklyn.

Under the federal prevailing wage law, contractors as well as subcontractors on construction projects that are federally funded are required to pay the prevalent rate of wages and benefits to their workers, and their classifications and wages must correspond on the actually work that they performed.

The defendants have been charged in a New York State Supreme Court indictment with insurance fraud in both the second and third degrees, grand larceny in the third degree and scheming to defraud in the first degree, amongst other charges.

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