N.Y. Contractor Must Pay $887K for Wage Violations

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By John Herzfeld

May 20 — A New York City drywall subcontractor has been sentenced to three years’ probation and must pay nearly $887,000 in a prevailing wage case involving eight workers on a public housing project restoration job, state Attorney General Eric T. Schneiderman (D) announced.

Sergio Raymundo of New Paltz, N.Y., was sentenced May 20 before Justice Larry Stephen of state Supreme Court for New York County. His company, Lalo Drywall Inc., was granted a conditional discharge, a sentence short of formal probation. Both were barred from working on public projects for five years.

In March, Raymundo pleaded guilty to falsifying business records and failing to pay wages, and the company admitted to falsifying business records (54 DLR A-8, 3/21/16). The plea agreement called for them to pay $793,510 in restitution and $83,144 in unpaid unemployment insurance contributions.

Wraps Up Joint Probe

The sentencing ended the largest of several prevailing wage cases stemming from a joint probe by the attorney general's office and the city Investigation Department into allegations of underpayment and kickback schemes in city projects from January 2012 to November 2014.

The enforcement sweep has yielded nearly $1.5 million in restitution to workers and seven plea agreements by subcontractors, the attorney general said.

“Wage theft is a crime, one that frequently involves companies exploiting low and middle income workers for their own gain,” Schneiderman said in a statement, adding that his office “will continue to aggressively prosecute” wage and hour cases.

A Legal Aid attorney representing Raymundo didn’t respond May 20 to a request for comment.

To contact the reporter on this story: John Herzfeld in New York at jherzfeld@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com