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Feb
2013
7

NY AG Schneiderman Sets New Tone for Wage Theft Punishment by Levying Felonies on Violator

NY AG Schneiderman



New York Attorney General Eric Schneiderman is taking the fight against wage theft to new levels and the owner of a tile subcontracting company who did work on JFK Airport is the first of many who will feel his wrath.

While most wage theft cases involve fines and penalties along with threats of future banishment from government contracts for repeated behavior, Schneiderman has arrested and arraigned Leonid Fridman, owner of the Brighton Beach based Millennium Commercial Corp., and charged him with two class C felonies, one class D felony, and 104 Class E felonies.

Fridman used a Florida-based corporation to launder money he was receiving as a forced kickback from his workers. The elaborate scheme involved Fridman filling out the proper paperwork and records showing he was paying the prevailing wage of $50 per hour for Laborers and Mason Tenders (and over $70 per hour for Tile Setters), only to force the workers to cash the checks and return to him nearly 80 percent of the money. Workers eventually were paid between $10 and $30 an hour. Fridman kept over $100,000 for himself, laundering it through his Florida business.

According to Schneiderman’s Press Release,

“Mr. Fridman not only stole state dollars from his own workers, but he demanded kickbacks and laundered money to cover his tracks. My office will continue to take action, including filing criminal charges, against employers who violate New York’s labor laws, steal taxpayer dollars and violate the public trust.”

Last week Fridman was arraigned by Queens Criminal Court Judge Donna-Marie E. Golia. The charges against him include:

Fridman faces one count each of Grand Larceny in the Second Degree and Money Laundering in the Second Degree. Both are class “C” felonies punishable by up to 5 to 15 years behind bars. He also faces a Violation of Labor Law charge, a class “D” felony, and 52 counts each of Falsifying Business Records in the First Degree and Offering a False Instrument for Filing in the First Degree, class “E” felonies.

Robert Van Etten, Inspector General for the Port Authority of NY & NJ,

“Companies doing business with municipalities, state agencies and authorities are legally bound to pay their employees the fair and prevailing wage. In this case, the defendant chose to enrich himself at the expense of his own workers by creating an elaborate fraud to conceal and disguise the nature, location, source, ownership and control of the funds. This arrest will serve notice to all contractors that the Port Authority of NY & NJ will not tolerate wage fraud or any other criminal misconduct on public projects. The Port Authority Office of the Inspector General and its Law Enforcement partners will aggressively identify, investigate and bring to justice those who corrupt the integrity of the construction industry.”

Unfortunately these types of schemes happen regularly in America but this specific case is newsworthy because of the severity of the punishment levied. A slap on the wrist and some bad publicity have become the norm in these types of cases so the decision to take strong action by Schneiderman is important. It shows that in New York wage theft is not going to be tolerated. As noted by Daily Kos labor writer Laura Clawson,

Usually, crimes employers commit against workers are punished by nothing more than fines and financial settlements—and fines that often get bargained down to laughable levels, at that. So the news that New York Attorney General Eric Schneiderman has actually arrested a construction firm owner for wage theft and laundering stolen wages? That’s real news.

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