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Post date: April 10 2003

Contractor Working At Queens College Arrested For Conducting Wage "kick-back" Scheme

State Attorney General Spitzer announced today the arraignment of a Queens construction contractor and his corporation on 65 felony and seven misdemeanor charges stemming from a scheme that forced five laborers to "kick-back" wages to the corporation's principal in excess of $100,000.

Savvas Savva and Euro Craft Restoration, Inc. were charged with receiving a "kick-back" in wages, failing to pay wages, theft from New York State's Dormitory Authority, perjury and falsifying business records in an attempt to conceal the "kick-backs" and the larceny. The arrest is a result of an ongoing investigation by the New York State Department of Labor at the Queens College campus in Kew Gardens.

"The requirement that an employee return a substantial cash payment of his hard earned wages to his employer as a condition of continued employment is reprehensible," Spitzer said. "Any contractor who secures payments from a contracting authority by providing false paychecks and payroll records will be prosecuted to the fullest extent of the law."

Dormitory Authority Executive Director Maryanne Gridley said, "Today's arraignment demonstrates the Dormitory Authority's commitment to rooting out contractors who try to skirt the law on prevailing wages. We continue to fund a full-time wage investigator at DOL to enforce prevailing wage laws on our construction projects in New York City. We thank Attorney General Spitzer and Commissioner Angello for their support of our fraud detection efforts."

State Labor Commissioner Linda Angello said, "During the Pataki administration, questionable business practices have become less frequent, as we continue to educate employers on labor issues and crack down on businesses who violate labor laws. As the initial investigator, the Department of Labor uncovered more than just statutory violations and collaborated with appropriate state agencies to further evaluate the case for possible criminal prosecution. This collaborative effort between the State Labor Department, the Dormitory Authority and the State Attorney General's Office is a shining example of agencies working together for the betterment of all New York State's citizens."

Savva, of East Elmhurst, and Euro Craft Restoration, Inc., located in Long Island City, are facing numerous charges, including Grand Larceny in the Second Degree, a class C felony, five counts of Grand Larceny in the Third Degree, a class D felony, 13 counts of Offering a False Instrument for Filing in the First Degree, a class E felony, 10 counts of Falsifying Business Records in the First Degree, a class E felony, 36 counts of Perjury in the Second Degree, a class E felony, and 7 misdemeanor counts of "Kick-Back"of Wages and Failing to Pay Wages. If convicted on the top grand larceny charge, Savvas faces a maximum of 15 years in prison. The defendants entered not guilty pleas today before Queens County Criminal Court Judge Suzanne Melendez.

According to court papers, between July 28, 2001 and May 24, 2002, Savva filed certified payroll records and payment requisition forms attesting that the workers on the project were paid prevailing wage rates. The Queens College construction contract was subject to the state's prevailing wage law, which dictates the hourly rates that must be paid to employees on public work projects.

While the payrolls listed each worker by name, hourly wages, gross wages paid, deductions, and net wages paid, it is alleged that the workers did not receive all the money contained in their pay checks. It is also alleged that Savva required employees to "kick-back" a portion of the wages in cash, to him and his company. According to the felony complaint, Savva had five employees "kick-back" a total of $105,741 in wages. In the case of two other employees, not required to "kick-back" wages, Savva is alleged to have underpaid them by a total of $3,562.11.

The charges in the case are mere accusations and the defendants are presumed innocent unless and until 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, and Investigator John Negus of the AG's Investigations Bureau, along with Department of Labor Bureau of Public Work Investigator Erin Butler. The case is being supervised by M. Patricia Smith, Attorney in Charge of the Labor Bureau, and Zachary Weiss, Deputy Bureau Chief in the Criminal Prosecutions Bureau.