A.G. Schneiderman Secures Jail Sentence For Bronx Car Wash Owner Who Underpaid Workers

Convicted Employer Sentenced To Incarceration, Probation, And To Pay $150,000 In Restitution To Minimum Wage Workers

Schneiderman: Employers of Low Wage Workers Are Not Above the Law

 

NEW YORK--Attorney General Eric T. Schneiderman today announced his office secured a sentence of jail time and probation for Bronx employer Alex Moreno, for failing to pay the minimum wage to employees at the Getty car wash and gas station he owned and operated in Bronx County. Moreno is also ordered to pay $150,000 in restitution to workers as a condition of probation. The sentence, handed down by Judge Steven Barrett of Bronx Supreme Court, requires Moreno to serve four months of weekends in jail and three years of probation. 

"When an employer blatantly violates the state’s labor law, my office will take forceful action to protect New York's workers, including criminal charges where appropriate,"  said Attorney General Schneiderman. "This car wash owner's utter disregard for our labor laws resulted in a criminal conviction and landed him in jail. This prosecution makes clear that dishonest employers of low wage workers are not above the law." 

In addition to the $150,000 in restitution, the court also entered two judgment orders of restitution, one in the amount of $52,493.34 in favor of the New York State Unemployment Insurance Fund and one in the amount of $30,000 in favor of the New York State Workers' Compensation Board. Under New York Labor Law, an employer who fails to pay the minimum wage or other promised wage is guilty of a misdemeanor, punishable by up to one year in jail. 

According to a felony complaint filed in the case on March 25, 2009, during the period from March 2007 through January 2009, Alex Moreno was the owner and CEO of Moreno Service Corp, which operated a Getty gas station and car wash at 1413 Edward L. Grant Highway, Bronx, New York. Moreno was present at the premises nearly every day and oversaw the running of the business. 

During this time, Moreno personally paid eight car washers only $4 per hour, for working twelve hours per day, six days per week, and also failed to pay overtime as required by law. The minimum wage, currently $7.25, was $7.15 per hour at the time of the violations. Employers are required to pay overtime at 1 ½ times an employee's regular rate of pay for all hours past forty in a given week.

Additionally, from May to September 2008, the business did not have workers' compensation insurance, leaving employees without coverage. The company also failed to pay certain required unemployment insurance taxes because it did not list all employees on 20 NYS Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Tax Returns signed by Moreno and filed with the state.

Morenoand Moreno Service Corp. were indicted on June 29, 2010 under indictment number 2235/2010. The indictment charged the defendants with one count of Failure to Secure the Payment of Compensation for More than Five Employees Within a Twelve Month Period, under Workers' Compensation Law Section 52.1(a), a class "E" felony; twenty counts of Falsifying Business Records in the First Degree, under Penal Law Section 175.10, a class "E" felony; twenty counts of Offering a False Instrument for Filing in the First Degree, under Penal Law Section 175.35, a class "E" felony; five counts of Failure to Pay Wages in Accordance with the Labor Law, under Labor Law Section 198-a, an unclassified misdemeanor; one count of Failure to Maintain Records, under Labor Law Section 198-a(2), an unclassified misdemeanor; and one count of Willful Refusal or Failure to Pay a Contribution to the Unemployment Insurance Fund, under Labor Law Section 633, an unclassified misdemeanor.

On May 24, Moreno pleaded guilty to one count of Failure to Pay Wages in Accordance with the Labor Law, under Labor Law Section 198-a, an unclassified misdemeanor, and Moreno Service Corp. pleaded guilty to one count of Failure to Secure the Payment of Compensation for More than Five Employees Within a Twelve Month Period, under Workers' Compensation Law Section 52.1(a), a class "E" felony, and Offering a False Instrument for Filing, under Penal Law Section 175.35, a class "E" felony. 

Deborah Axt, Co-Executive Director of Make the Road New York,said, “Bosses who steal money out of their workers' pockets are no different than any other thief, and in this case, one of them is going to jail for his illegal actions. We have seen countless similar abuses across the car wash industry in New York and are thrilled that Attorney General Schneiderman has taken on the challenge of cleaning up an industry that has been allowed to operate in the shadows for too long. We congratulate the Attorney General and his staff for taking on car wash industry labor abuses, to ensure that hard working New Yorkers receive the wages they are owed.” 

Mario Cilento, President of the New York State AFL-CIO, said “The car wash industry is rife with abuses, including failure to pay minimum wage or provide workers compensation insurance; now this jail sentence should serve as a wake-up call to abusive managers that law enforcement is taking action. We're confident that New York’s Attorney General will continue to protect workers by enforcing our labor laws to the fullest.”

The Attorney General thanked the New York State Department of Labor and the New York State Workers' Compensation Board for their work on the investigation.

The case was prosecuted by Assistant Attorney General Meredith McGowan, under the supervision of Felice Sontupe, Section Chief, Terri Gerstein, Chief of the Labor Bureau, Janet Sabel, Executive Deputy Attorney General for Social Justice, and Nancy Hoppock, Executive Deputy Attorney General for Criminal Justice.

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