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Coalition Against Insurance Fraud

New York construction firm allegedly stiffs insurer out of $7.8M

May 16, 2018, Queens, NY — Wage theft and insurance fraud charges were lodged Wednesday against a Queens construction firm and a payroll processing company for a scheme that netted a crew of crooked employers nearly $10 million, according to authorities.

Instead of paying construction workers what they earned on projects including The Marriott Hotels on Pearl Street and the Steinway Tower at W. 57th Street, owners of Parkside Construction conspired with a payroll company to stiff at least 520 workers out of more than $1.7 million in wages and benefits between 2014 and 2017, said Manhattan DA Cy Vance.

In order to keep track of employees' earnings, Parkside, a Queens-based firm, used computerized face-recognition machines at worksites to record workers' hours.

But printouts from the on-site time-keeping machines were later altered and updated with lower weekly hours than those actually worked, Vance said.

The falsified timesheets were then submitted for processing to Affinity Human Resources, the payroll processing company,which paid some workers' wages with "expense reimbursement" checks to hide the fact that these payments were compensation.

"Amid Manhattan's luxury building boom, sometimes it's all too easy to overlook the human beings behind the scaffolding," Vance said "Construction workers are responsible for some of the most dangerous jobs in the city, and whether they're working thousands of feet up in the air or 20 feet below ground-level, they deserve to be paid fairly and fully for their work."

During that same time, Parkside also hid more than $40 million in payroll from the New York State Insurance Fund in order to maintain the workers' compensation coverage at fraudulently low premiums.

In New York State, all employers are required to maintain workers' compensation coverage for their employees. The premium for workers' compensation insurance is based on the level of payroll and the type of work performed by a company's employees.Based on numerous false statements and submissions, the defendants failed to report more than $42 million in payroll, thereby evading more than $7.8 million in insurance premiums.

Charges against the executives named in the scheme include insurance fraud and grand larceny.The DA's office is also a civil forfeiture action to recoup the stolen money.

Source: New York Daily News

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