Contractor Sentenced For Failing To Pay Prevailing Wages

Attorney General Spitzer said today that a Maryland-based contractor has been sentenced for failing to pay prevailing wages on highway maintenance projects.

As part of that sentence, the president and vice-president of the firm were ordered to pay $310,000 in restitution to workers who had been cheated by defendants of their legal pay.

Paint City Contractors, Inc. and its president, George Forakis, who had pleaded guilty in October 2001 to Scheme to Defraud in the First Degree, a class E felony, were each sentenced to pay the maximium fine of $10,000 and are prohibited from engaging in public work projects in New York. George Forakis’ son, vice president of operations, Panagiotis Forakis, who in December 2001 had pleaded pleaded guilty to Failure to Pay Prevailing Wages, a class A misdemeanor, was sentenced to pay a fine of $1,000, and is prohibited from engaging in public works projects in New York State for five years.

At the time of their plea, George and Panagiotis Forakis admitted that they engaged in a fraudulent scheme to pay their employees less than the prevailing wage, in violation of the provisions of the Labor Law, with regard to work which Paint City Contractors, Inc. performed on the contract. To conceal and facilitate their under-payments to workers, defendants admitted that they created and submitted false certified payroll reports to the New York State Thruway Authority.

Judge Stewart Rosenwasser ordered the three defendants to jointly pay restitution amounting to $310,000 to reimburse those employees who were not paid the prevailing wage while working on the project. At the time of their plea, the defendants executed documents releasing $294,549.15 currently held by the New York State Comptroller’s Office to be forwarded to the New York State Department of Labor for distribution to the underpaid employees. The defendants agreed to execute any additional documents necessary for the Department of Labor to have access to the entire restitution amount.

The criminal case was prosecuted by Assistant Attorney General Mary B. Kavaney, Attorney in Charge of the Poughkeepsie Regional Office, and Assistant Attorney General Christopher P. Borek. The Department of Labor was represented by Assistant Attorney General Richard Balletta of the Labor Bureau.