Contractors Admit Stealing More Than $6.5 Million In Wages From Over 400 Workers On Nyc Housing Authority Contracts

NEW YORK, NY (January 26, 2007)—State Attorney General Andrew M. Cuomo and New York City Department of Investigation Commissioner Rose Gill Hearn today announced that three construction contractors, and their principals, pleaded guilty in connection with their failure to pay more than 400 workers more than $6.5 million in wages.

Between February of 2000 and January of 2004, the principals and their companies employed a scheme to illegally pay low wages to workers on construction projects contracted by the New York City Housing Authority (NYCHA). The projects — kitchen and bathroom renovations — were subject to the New York State prevailing wage law, which dictates the hourly rates contractors must pay employees working on public projects. The joint investigation by the Attorney General's Office and the Department of Investigation’s Office of the Inspector General for the Housing Authority revealed that, in addition to violating prevailing wage laws, the defendants prepared and submitted to NYCHA certified reports and affidavits falsely asserting that the workers had been properly paid.

The investigation revealed that the defendant contractors underpaid more than 400 employees by more than $6.5 million.

Attorney General Cuomo said, "For too long, these unscrupulous contractors have failed to pay the prevailing wage on New York City Housing Authority housing developments. My office will vigorously prosecute these contractors in an effort to stop the practice and ensure that workers get paid their rightful wage. We will not allow contractors to place millions of dollars in their pockets by exploiting their workers and the agencies for which they perform work. Reforming the public construction industry requires the use of all appropriate penalties, including incarceration and forfeiture of proceeds from these crimes as done in this case."

Department of Investigation (DOI) Commissioner Rose Gill Hearn said, "In pleading guilty, these defendants have admitted that they unjustly and illegally tried to make an enormous profit on the backs of more than 400 hard-working laborers who were renovating kitchens and bathrooms at NYCHA housing developments. To help bring today's pleas, DOI investigators examined thousands of documents and interviewed hundreds of workers during this lengthy probe. This joint investigation demonstrates that DOI and the Attorney General's Office can help NYCHA protect the workers on its construction projects from greedy, unscrupulous contractors.”

Denis N. Hughes, President of the 2.5 million member New York State AFL-CIO said, “We appreciate Attorney General Cuomo’s commitment to enforcing prevailing wage law. Today’s historic settlement is a victory not only for the workers involved in this case, but for all working men and women throughout this state. We look forward to continuing to work with the Attorney General in his efforts to protect the needs, interests, and dignity of working people.”

Ed Ott, Executive Director of the New York City Central Labor Council said, “Construction workers are often vulnerable to abuse and being short-changed by unscrupulous employers, especially when they do not have unions to represent them. That is why outside monitoring and aggressive law enforcement is so important. We are thankful for the excellent work of Attorney General Cuomo, Commissioner Gill Hearn, and their dedicated staffs on this case.”

Defendants Spiridon Anthoulis, 4-A General Construction Corp., and SNA General Construction Corp. were each charged with Grand Larceny in the Third Degree, a class D felony, and Failure to Pay Wages in Accordance with the State Labor Law, a class A misdemeanor. All three defendants pleaded guilty today in Queens County Supreme Court and will be sentenced in March of 2007. Anthoulis faces jail time on the grand larceny charge and must, along with 4-A General Construction Corp., pay restitution to employees and penalties totaling in excess of $7.2 million.

Anastasia Anthoulis was charged with Failure to Pay Wages in Accordance with the State Labor Law, a class A misdemeanor. She pleaded guilty in Queens County Criminal Court and was sentenced to a conditional discharge and ordered to pay penalties and restitution, along with defendants Spiridon Anthoulis, 4-A, and SNA, of more than $7.2 million.

In October of last year, two additional defendants pleaded guilty in connection with their participation in the scheme. Defendant Kalinikki Zarboutis pleaded guilty to Offering a False Instrument for Filing in the First Degree, a class E felony, and misdemeanor failure to pay wages, and defendant SSN General Construction Corp. pleaded guilty to Grand Larceny in the Second Degree, a class C felony, and misdemeanor failure to pay wages. They will be sentenced in March of 2007 and face $2.3 million in restitution and fines.

The convictions also prohibit the principals and their companies from performing any public work in New York State for a period of five years.

The case is being handled by Assistant Attorney General Richard Balletta under the supervision of Deputy Bureau Chief Jennifer S. Brand of the Labor Bureau, and Deputy Bureau Chief Laurie Israel of the Criminal Prosecutions Bureau. The investigation was conducted by Investigator Jerold Nichols of the Attorney General’s Investigations Bureau, under the supervision of Deputy Chief Investigator Henry Lemons, along with Senior Deputy Inspector General Irene Serrapica and Confidential Investigator Ivonne Alvarado-DeJesus of the New York City Housing Authority Inspector General’s office, a division of the New York City Department of Investigation. The New York City and Vicinity Carpenters Labor-Management Corporation and the Greater New York Laborers-Employers Cooperation and Education Trust assisted in the investigation.

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