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May
2016
27

Million-Dollar Prevailing Wage Underpayment Scheme Busted Up by Feds in Chicago Burbs

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A suburban Chicago contractor is facing federal charges for failing to pay $1.5 million in prevailing wages to union workers on public works projects between 2008 and 2013. For his part of the scheme, Joseph Lampignano, owner of co-owner of A Lamp Concrete Contractors Inc., faces one count of mail fraud and up to 20 years behind bars.

According to the US Attorney’s office for the Northern District of Illinois, Lampignano also filed false reports to the union’s’ pension and welfare funds that underreported the number of hours worked by certain laborers.  By doing so the company lowered the required contribution it was to make by over $1 million.  

Also facing charges will be A Lamp Concrete Superintendent Giovanni “John” Traversa, who has been charged with forcing workers to pay “kickbacks” after they won a settlement brought against the company.  According to the U.S. Attorney’s Office, both Traversa and Lampignano used their positions of power to force certain employees to pay them back at least $64,000 of the $545,357 settlement. Traversa is charged with one count of making false statements to the Federal Bureau of Investigation and the U.S. Department of Labor Office of Inspector General and could face up to 5 years in prison.  

Lampignano was also part of the kickback scheme:

Lampignano settled the funds’ civil lawsuit and the union’s grievance by agreeing to pay certain sums of money to twenty-four laborers for unpaid wages, knowing that he intended to later request the laborers to repay some of the settlement money that he had agreed to pay them.

It was further part of the scheme that, subsequent to the payment of the settlement funds, Lampignano directed Traversa and others to approach certain laborers and ask them to repay a portion of the money that they had received pursuant to the settlement agreement.

It was further part of the scheme that Lampignano provided Traversa with a list of the amounts of settlement money that A Lamp had paid to each of the twenty-four laborers, and how much he (Lampignano) wanted to be repaid (totaling $140,000) by nineteen of those laborers.

The case represents the latest in a series nationwide prevailing wage fraud schemes that have been broken up by the government.  Construction Drive recently broke down several others.

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