Attorney General Cuomo & Nys Task Force Announce Arrest Of Nyc Restaurant Owner For Failure To Cover Employees With Workers’ Compensation Insurance

NEW YORK, N.Y. (September 23, 2008) - Attorney General Andrew M. Cuomo, the New York State Department of Labor (NYSDOL), and the Workers’ Compensation Board today announced the arrest of the owner of a popular midtown pizza restaurant for failing to secure workers’ compensation coverage, pay overtime wages and make required contributions to the State Unemployment Insurance Fund. The employer is also charged with submitting false statements to the Workers’ Compensation Board and the Department of Labor.

This is the first criminal prosecution resulting from investigations conducted by the Joint Enforcement Task Force on Employee Misclassification, which was established by an Executive Order in September 2007 to address the problems caused by off-the-books employment and the misclassification of employees as independent contractors. 

Atmi Kurtishi, 48, the President of Madrit’s Gourmet Restaurant, Inc., which operates “Madrit’s Pronto Pizza” at 55 West 55th Street, New York, New York, failed to have workers’ compensation insurance while employing more than five employees, in violation of the new Workers’ Compensation Law that makes such actions a class E felony, punishable by up to 4 years in prison. 

The Attorney General and the New York State Department of Labor also charged Kurtishi with 13 counts of fraud, all class E felonies, for lying to State Agencies by filing false documentation.  Kurtishi further failed to pay his workers overtime wages in the amount of $88,350.55, a class A misdemeanor, punishable by up to a year in jail. In addition to paying back the workers the wages they earned, Kurtishi also faces fines and penalties of over $100,000.

“Mr. Kurtishi’s decision to line his pockets with money, instead of providing his workers with the wages and benefits they earned, shows a blatant disregard for New York State’s workers’ compensation and labor laws,” said Attorney General Cuomo. “Today’s arrest sends a clear message that my office will aggressively prosecute all employers who seek to make their profits on the backs of their workers.”

“This arrest is a striking example of how far the state is willing to go to reverse years of lax enforcement and protect the basic rights of workers under the labor law,” said New York State Commissioner of Labor M. Patricia Smith.  “This Joint Enforcement Task Force is a powerful and unprecedented tool that will seek out employers who misclassify and cheat their workers out of required pay, benefits and protections.”

“At its core, workers’ compensation is a mutually beneficial agreement between employers and their employees,” New York State Workers’ Compensation Board Chair Zachary Weiss said. “When an employer doesn’t live up to that agreement and endangers the well-being of their employees, New York will hold them accountable for their actions.”

Kurtishi operated his business from at least March 31, 2004 until November 1, 2007 without paying workers’ compensation coverage for his employees. In 2006, the Workers’ Compensation Board notified Kutrishi that it had assessed a fine in the amount of $15,000 for his failure to maintain coverage. To avoid the fine, Kurtishi allegedly sent the Workers’ Compensation Board a letter falsely stating that his business had no employees. 

In addition to his false submission to the Workers’ Compensation Board, Kurtishi allegedly under-reported the number of employees in his quarterly tax filings to the State, and thereby avoided paying contributions to the Unemployment Insurance Fund for most of his workers. Unemployment insurance provides temporary income for eligible workers who become unemployed through no fault of their own and who are ready, willing, and able to work.

If an employer does not pay into the fund, it can be extremely difficult for a worker to access those benefits.  Having failed to pay his share, mandated by law, Kurtishi put his workers and their families in jeopardy and cheated taxpayers, who pay ever higher amounts to keep the system working.

“Employers across New York State who violate the Workers’ Compensation and Labor Laws abuse the entire system - harming their workers, law-abiding businesses, and ultimately, the taxpayers of this State,” added Attorney General Cuomo.

This is the third arrest under New York’s new Workers’ Compensation Law, which became effective on April 12, 2007, and the latest arrest in a series of actions brought by the Attorney General to protect workers.  Recently, he secured the arrest of two employers, one in the Capital region and the other in New York City, for failure to secure workers’ compensation coverage for more than five employees. In July of this year, Cuomo secured the arrest and arraignment of two contractors who kept more than $500,000 in wages from 84 construction workers for work performed on public construction projects throughout New York City.  Earlier this year, Cuomo recovered over $1,000,000 for hundreds of Bronx construction workers who were shortchanged out of overtime pay.

This case is being prosecuted by Assistant Attorney General Meredith McGowan with Investigator Brian Ford of the Attorney General’s Office, Workers’ Compensation Board Investigators Winston Furnam and David Regazzi, and Department of Labor Investigators Cloty Ortiz and Iris Rivera.  This case is being supervised by Deputy Attorney General for Social Justice James Rogers and Deputy Bureau Chief of the Attorney General’s Criminal Prosecutions Bureau Felice Sontupe.

The charges against the defendants are merely accusations and the defendants are presumed innocent until and unless proven guilty.

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