A.G. Schneiderman Announces Sentencing Of Brooklyn Tortilla Factory Owner For Labor Law And Workers' Compensation Violations

Owner Erasmo Ponce Ordered To Pay $450k In Restitution And Sentenced To 90-Day Jail Term After Pleading Guilty To Violating Workers Compensation And Wage Laws

Schneiderman: We Will Use All Available Tools To Protect New York's Workers

NEW YORK -- Attorney General Eric T. Schneiderman today announced the conviction and sentencing of Erasmo Ponce, the owner of Tortilleria Chinantla Inc., a corn tortilla factory in Brooklyn. Ponce pleaded guilty to a misdemeanor charge in June and was ordered to pay nearly $450,000 in restitution, including to cover a death benefit paid by the state Worker’s Compensation Board to the daughter of a worker killed at the factory in 2011. He was sentenced to 90 days in jail by Brooklyn Criminal Court Judge Alexander Jeong today.

“All of our labor laws – minimum wage laws, the workers’ compensation law, safety and health laws – exist to protect vulnerable workers and ensure a basic safety net of protection,” Attorney General Schneiderman said. “My office will use all tools at our disposal, including criminal charges where appropriate, to seek justice for New York's workers and their families.”

In addition to the jail term, Ponce has paid $447,943.11 in restitution. Of that, $300,000 goes to the Workers Compensation Board to reimburse the agency for the benefit payment made to worker Juan Baten’s young daughter. Another $138,000 will go to the New York State Department of Labor to cover overtime wages owed Ponce’s 28 employees during the six-year period, from 2006 to 2011, in which they were not paid the legally required over-time wages. The remaining $9,943.11 will go to formerly unpaid unemployment Insurance taxes.

Multiple government agencies opened investigations into conditions at the 975 Grand Street factory in January 2011 when Baten, who was 22 years old, was killed in an accident. The New York State Workers Compensation Board found that the factory owner had not purchased legally mandated Workers Compensation Insurance and additional investigation revealed that the employer failed to pay employees overtime wages.

Ponce, 57, of Whitestone, Queens, is the owner and chief executive of Tortilleria Chinantla, Inc., which continues to operate. The company had more than five employees between March, 28, 2008 and January 24, 2001, and yet failed to have workers' compensation insurance, which is a felony in New York State. In addition, Ponce, who paid his employees in cash, did not report all of his employees on his company’s New York State Tax filings for the purposes of paying unemployment insurance contributions.

Ponce was arrested by the Attorney General’s office in this case on March 27, 2012. He and his company were charged with two counts of Failure to Secure the Payment of Compensation for more than Five Employees in violation of Workers compensation Law § 52.1(a), a class E felony, twelve counts of Falsifying Business Records in the First Degree, a violation of Penal Law § 175.35, a class E felony; twelve counts of Offering a False Instrument for filing in the First Degree, a violation of Penal Law § 175.35, a class E felony, twelve counts of Willful failure to pay contributions - Unemployment Insurance in violation of Labor Law § 633, a class A misdemeanor and eleven counts of Failure to Pay Wages in violation of Labor Law § 198-a, a class A misdemeanor.

On June 12, 2012, Tortilleria Chinantla Inc., pleaded guilty to one count of a violation of Workers' Compensation Law §52.1(a), Failure to Secure the Payment of Compensation for more than five employees, a class E felony and one count of a violation of Labor Law § 198-a a class A misdemeanor. Ponce pleaded guilty to one count of violation of Labor law §198-a, a class A misdemeanor. The defendants were both sentenced today. The company was sentenced to a conditional discharge.

New York State Workers' Compensation Board Chair Robert Beloten said, “Governor Cuomo is focused on ensuring that the most vulnerable individuals are protected in the workplace and responsible employers are not penalized for those employers that ignore the law. Under his leadership, the Workers' Compensation Board and our fellow agencies have and will continue to work with law enforcement, including the Attorney General, to aggressively pursue those employers that fail to protect their employees in the event of work place accidents."

The case was investigated by Workers' Compensation Board Investigator Ismael Correa under the supervision of retired Supervising Investigator Leonard Frasco and Supervising Investigator Teri Cooper. The Attorney General thanked the New York State Workers' Compensation Board for their work on the investigation. The Attorney General also thanked the New York State Department of Labor for their assistance.

The case was also investigated by New York Attorney General Senior Investigator Brian Ford, Investigator Michael McNally under the supervision of Supervising Investigator Kenneth Morgan.

The case was prosecuted by Section Chief Felice Sontupe under the supervision of Terri Gerstein, Chief of the Labor Bureau, Alvin Bragg, Executive Deputy Attorney General for Social Justice, Kelly Donovan, Executive Deputy Attorney General for Criminal Justice, and Janet Sabel, First Deputy Attorney General for Affirmative Litigation.

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