December 10, 2014
By Stephanie West
New York, NY – A contractor and two labor brokers overseeing New York City School Construction Authority (SCA) and Housing Authority (NYCHA) projects were arrested for underpaying construction workers.
The indictments stem from an investigation into underpayment and kickback schemes on projects at P.S. 196K, in Brooklyn, and the Pomonok Houses Project in Queens. As alleged, workers were deprived of several thousand dollars. If convicted on the top counts, each defendant faces up to seven years in prison.
“Contractors who work on public projects cannot ignore New York State’s labor laws in order to line their own pockets,” said Attorney General Schneiderman. “In this case and many others, my office is taking aggressive action, to ensure that workers are paid the wages they’ve earned.”
Exterior renovations at P.S. 196K were being performed under a contract with the SCA. Article 8 of New York State Labor Law mandates that construction workers on any “public works” project receive prevailing wages, an hourly rate (above minimum-wage) that varies depending on the classification of the worker, and benefits.
Many of the construction workers got their job through “labor brokers” Baldev and Avatar Singh. The Singh brothers would receive the workers’ wages from the contractor and disperse the money to the workers. However, as alleged in the indictment, the Singhs then established what amounted to a maximum daily rate for each worker – a figure well below the proper prevailing rate of pay – and demanded any earnings above that amount for themselves. While the contractor was paying the proper wages, the Singhs would require that they be payed kickbacks from employees.
After the P.S. 196K construction was complete, the Singhs moved on to act as “brokers” on a NYCHA project in Queens known as the Pomonok Houses Project. From September 2014 through November 2014, Baldev and Avtar Singh allegedly engaged in the same systematic scheme of demanding “kickbacks” from workers.
“Not only does prevailing wage fraud deprive honest workers of fair pay, but it is a gateway to other schemes that endanger public safety. Exposing and putting an end to prevailing wage fraud is a cornerstone of DOI’s multi-pronged effort to combat corruption in New York City construction,” New York City Department of Investigation Commissioner Mark G. Peters said.