Construction Contractor Indicted For Stealing More Than $200,000 From The New York City Housing Authority

State Attorney General Spitzer and New York City Department of Investigation Commissioner Rose Gill Hearn today announced that a former construction contractor and his corporation were arraigned on felony and misdemeanor charges stemming from the theft of more than $245,000 from the New York City Housing Authority, the failure to pay 17 workers wages required by state law, and the falsification of business records that were filed with the Authority in an attempt to conceal the larceny.

Azam Ali Chaudhry and Republic Construction & Management, Inc. were charged with Grand Larceny in the Second Degree, a class C felony, four counts of Offering a False Instrument For Filing in the First Degree, a class E Felony, four counts of Falsifying Business Records in the First Degree, a class E felony, and seventeen counts of Failure to Pay Wages in Accordance with the state labor law, a Class A Misdemeanor.

The defendants entered not guilty pleas before Bronx County Criminal Court Judge Kiesel, who ordered that the Defendant Chaudhry could be released after posting a $50,000.00 bail.

"This case is especially egregious because it involves theft of taxpayer monies from a public agency and the abuse of workers who are entitled to be paid what the law requires for their work," Spitzer said. "This case should send a clear message to other contractors who perform prevailing wage work for public agencies: you cannot reap profits at the expense of your workers."

"Firms working on public works contracts are legally mandated to pay their employees a fair and prevailing wage. This case should be a warning to all potential contractors that the City will not tolerate wage fraud or any other cheating on public contracts," said Commissioner Gill Hearn.

According to court papers, between May 5, 2001 and January 15, 2002, Chaudhry and Republic employed the seventeen workers at the Bronxdale Houses in Bronx County. The work was subject to federal and state prevailing wage laws, which dictate the hourly rates that must be paid employees working on public projects. The defendants failed to pay the workers prevailing wages, and in some cases failed to pay any wages for the work performed.

A joint investigation by the Attorney General's office and DOI's Inspector General for the Housing Authority revealed that in addition to violating the wage laws, the defendants prepared and submitted false business records with Housing Authority inspectors misrepresenting that the employees were paid prevailing wage rates.

"I strongly applaud this arraignment," said Tino Hernandez, Chairman of the Housing Authority. "It sends out a very clear message to all of our contractors that they must comply with prevailing wage requirements or they will face similar penalties. Prevailing wage enforcement has always been, and will continue to be, a major initiative at NYCHA."

Chaudhry faces a maximum of five to fifteen (5-15) years in prison on the grand larceny charges, up to four (4) years on the false filing and false business records charges, and up to one (1) year on the misdemeanor charges. Republic Construction faces a fine of up to $491,000.

The charges in this case are accusations and the defendants are presumed innocent unless proven otherwise by a court of law.

The case is being handled by Assistant Attorneys General Richard Balletta and James W. Versocki of the AG's Labor Bureau, which is under the supervision of Bureau Chief M. Patricia Smith, and Investigator Ed Elie of the AG's Investigations Bureau, along with DOI Assistant Commissioner Steven A. Pasichow and Assistant Inspectors General John Kilpatrick and Irene Serrapica of the New York City Housing Authority Inspector General's office.
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