Parkside Construction, Affinity Human Resources and Other Company Officials Charged with Grand Larceny and Scheme to Defraud Workers Out of $1.8 Million in Wages
Defendants Also Charged with Defrauding the New York State Insurance Fund Out of $7 Million in Insurance Premiums
Governor Andrew M. Cuomo announced today that a joint investigation between the New York State Department of Labor, the Manhattan District Attorney and the Department of Investigation has led to the identification of $1.8 million in stolen wages and the arrest and indictment of the owners of one of New York's largest construction companies.
As a result of this investigation, six individuals have been arrested and charged with several counts of grand larceny, scheme to defraud and insurance fraud. Defendants Francesco and Salvatore Pugliese, co-owners of Parkside Construction and its corporate alter-egos, as well as other Parkside representatives: Payroll Manager Yenny Duarte, Supervising Foreman James Lyons, and Accountant Michael DiMaggio, used Affinity Human Resources, LLC - a Professional Employment Organization, to hide their illegal activity. Affinity's CEO Jerry Hamling has also been arrested. The defendants will be arraigned later today in Supreme Court, New York County.
"New York has zero tolerance for those who seek to break the law and deny a decent day's pay for a hard day's work," Governor Cuomo said. "We will continue to work with prosecutors across this great state to hold perpetrators accountable and protect our workforce."
"The fraudulent business practices Parkside Construction engaged in are not only harmful to its employees, they are grossly detrimental to our state's business climate as a whole," said Department of Labor Commissioner Roberta Reardon. "I thank District Attorney Cyrus Vance and his team for their cooperation and effort in this case and I applaud the dedicated Department of Labor staff that detected this fraud. Let this case serve as a warning to those who would seek to steal from hard-working New Yorkers: you will be brought to justice."
"Amid Manhattan's luxury building boom, sometimes it's all too easy to overlook the human beings behind the scaffolding," said Manhattan District Attorney Cyrus R. Vance, Jr. "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 twenty feet below ground-level, they deserve to be paid fairly and fully for their work. My Office made a commitment to fight wage theft, which impacts employees across all industries, but is especially common in the construction business, where unscrupulous employers like the ones charged in today's indictment are devising new and different ways to cheat and steal. Since launching our joint effort to ensure workplace integrity with Governor Cuomo and our local partners, my Office has returned hundreds of thousands of dollars in stolen wages to workers, and I thank our partners for their dedication to this important issue."
These latest arrests build on Governor Cuomo's aggressive efforts to deter fraudulent business practices, including the recovery and return of $258.4 million to 215,335 workers since taking office in 2011 - the highest total in the nation. Over the past year, the State Department of Labor has referred egregious wage theft cases to prosecutors who have subsequently filed criminal charges. These referrals have resulted in indictments, felony complaints or non-prosecution agreements stemming from investigations across several jurisdictions.
The most prominent case to date, the takedown of this major luxury developer and related companies resulted from DOL's continued partnership with law enforcement allies. The criminal case comes on the heels of a large scale DOL investigation last year revealing pervasive underpayment and other labor violations against Parkside companies and Affinity. Workers were victimized over the course of several years.
Parkside perpetuated a scheme to cheat hundreds of low-wage immigrant laborers of millions of dollars in hard earned wages. Beyond the massive wage theft component, the criminal investigation also redressed widespread insurance fraud. Parkside (and related entities) used a Professional Employment Organization named Affinity to carry out their unscrupulous and fraudulent practices. They cheated the state out of tens of millions of dollars in premiums by manipulating their records to undervalue actual payroll levels.
DOL is responsible for investigating instances of wage theft in New York State, and in 2017 alone, DOL returned $35,370,000 to 36,446 workers. Often, recoveries for workers can be achieved through compliance conferences where employers agree to pay workers what's owed without further administrative action. In egregious cases, or cases where employers refuse to pay or seek to hide their assets to avoid making payment, the Department relies on local District Attorneys to prosecute cases.
The overwhelming majority of businesses in the state follow the law, but some of the most common ways bad actors steal wages include:
- Paying tips only;
- Paying a day rate for work performed that is sub-minimum wage when hours worked are counted;
- Not paying an overtime rate for hours worked over 40 in a payroll week;
- Not paying for travel time between work assignments in the same day;
- Withholding final paychecks;
- Not paying for "training" time; and
- Charging employees for required uniforms or equipment.
Anyone who wishes to file a wage theft complaint is encouraged to call 1-888-4-NYSDOL.