Published on:

New York Construction Company Charged with Workers’ Compensation Fraud

architecture-blue-build-162557-300x194Affinity Human Resources and Parkside Construction of Queens, New York, have been charged with workers’ compensation insurance fraud as well as underpaying workers. A number of employees of both companies, including several executives, have been charged. All have pleaded not guilty.

Parkside Construction has worked on several projects during Manhattan’s current building boom, including Steinway Tower in Midtown and the Marriott Hotel on Pearl Street in the Financial District. The New York County District Attorney’s office alleges that Parkside Construction worked together with Affinity to underreport $42 million in payroll between 2014 and 2017.

In New York State, employers of construction workers are required to have full workers’ compensation coverage. Their insurance premiums are based on the kind of work executed by the employees as well as the level of payroll. By underreporting payroll, Parkside Construction was able to keep its workers’ compensation insurance artificially low. The DA’s office alleges they avoided paying $7.8 million in insurance premiums.

At the same time, Parkside Construction doctored their workers’ timecards. Face-recognition machines were used on worksites to record employees’ shifts. These timecards, however, were routinely changed to show fewer hours worked. One laborer, for example, had approximately $50,000 in wages withheld from him. According to the DA’s office, at least 520 workers were underpaid $1.7 million.

Parkside Construction submitted the doctored timesheets to Affinity Human Resources who then paid some workers with “expense reimbursement” checks in order to avoid insurance contributions and withholding taxes.

“You would think there would be enough money there to fairly compensate the hundreds of workers they hired,” said New York County District Attorney Cyrus Vance Jr. “Instead, Parkside Construction has been charged with systematically altering their workers’ timesheets, lowering their reclaimed wages, and then submitting the falsified timesheets to Affinity Human Resources.”

In 2015, employees attempted to sue Parkside Construction over the issue of withheld wages. The DA’s investigation has been ongoing since 2017.

Francesco Pugliese, co-owner of Parkside Construction denied all charges in a statement released through his attorney. “We have known about this investigation for over a year and look forward to showing the DA’s office and investigators why they are wrong in filing these charges against Parkside and other individuals that were indicted,” he said.

Peter Tilem, attorney for James Lyons, one of Parkside Construction’s supervising foremen, claims his client has been placed in a vulnerable situation because of the company’s behavior. “He’s not a wealthy guy,” said Tilem. “He’s a man who was working for a company that may or may not be corrupt.”

“Construction workers are responsible for some of the most dangerous jobs in the city, and whether they’re working thousands of feel up in the air or 20 feet below ground level, they deserve to be paid fairly and fully for their work,” said Vance.

At a news conference, Vance had a message for the construction industry at large. “We are saying to those in the construction industry as a whole who take advantage of their employees at the expense of the employee’s’ safety that you cannot hide the work that you are doing that defrauds your employees.”

Criminal charges include grand larceny and insurance fraud. In addition, the DA’s office is beginning civil asset forfeiture proceedings to recoup the money owed.

Florida Workers’ Compensation Fraud Defense Attorney

If you are involved in a worker’s compensation fraud investigation, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced workers’ compensation fraud defense attorneys.

Sources

2018-05-18 Queens Construction Company, Payroll Firm Underpaid Workers

2018-05-16 Queens Construction Firm and Payroll Company Hit With Wage Theft, Insurance Fraud Charges