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Post date: February 23 2010

The New York State Attorney General Andrew M. Cuomo Arrests Owner Of Popular New York City Clothing Stores For Cheating Workers Out Of $1.5 Million

NEW YORK, NY (February 23, 2010) - Attorney General Andrew M. Cuomo today announced the arrest of David Cohen, the owner of seven popular clothing stores in New York City, for allegedly failing to pay his employees proper legal wages, falsifying tax and business records, and trying to impede the Attorney General’s investigation. The Attorney General seeks to recover more than $1.5 million in unpaid wages and damages.

The Attorney General today filed both criminal and civil actions against Cohen. Cohen’s stores include Mystique Boutique (547 Broadway, 324 Fifth Avenue, and 412 Broadway); Madness Boutique (305 Canal Street); Exstaza (491 Broadway); and Amsterdam (454 Broadway and 365-367 Canal Street).

“In this case, workers were not only ripped off but were also intimidated to make sure they stayed quiet,” said Attorney General Cuomo. “All workers deserve fair pay and have a right to stand up for themselves. Today’s civil and criminal charges should send a strong message: No one is above the law. My office will take action against employers that take advantage of their workers and cheat the state’s unemployment insurance fund.”

From at least 2004, Cohen’s employees have often worked ten to eleven hours per day, six days per week. Most employees were not paid overtime when they worked more than forty hours in a work week, in violation of state and federal wage laws. In total, over 150 employees are owed more than $1.5 million in unpaid wages and damages.

According to the actions filed by the Attorney General’s office, once Cohen learned of the Attorney General’s investigation, he tried to prevent workers from cooperating with investigators. Cohen even tried to pay one worker up to $50,000 to acquire information about which workers were speaking to investigators. Several other workers were threatened not to sign anything in connection with the investigation or against the store.

Tax records reveal that Cohen and his companies falsified tax records by underreporting to New York State both the number of employees at his stores and their salaries. These records are relied on by New York State to calculate an employer’s liability to the unemployment insurance fund. By misrepresenting his total payroll each quarter, Cohen allegedly cheated the unemployment insurance fund and increased the burden on other New York employers.

Criminally, Cohen is charged with nineteen counts of “Falsifying Business Records” in the First Degree and nineteen counts of “Offering a False Instrument for Filing,” both of which are class “E” felonies that carry terms of up to four years in prison each. Cohen is also charged with criminal retaliation and with several misdemeanors, including five counts of “Tampering with a Witness,” “Failure to Pay Wages,” and multiple other Labor Law violations. Additionally, the Attorney General seeks civil damages of at least $1.5 million for the underpaid employees. Asaf Cohen, a manager and relative of David Cohen, is also charged in the civil case.

The civil case is being handled by Chief of the Attorney General’s Labor Bureau Patricia Kakalec. The criminal case is being handled by Assistant Attorney General Rachel Gold and Investigator Brian Ford. Both cases are under the supervision of Deputy Attorney General James Rogers.

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