Midwood Construction Company Guilty Of Stealing Nearly $150K From Employees
The owners of a Midwood construction company, who benefited from a program to assist minority-owned businesses, pleaded guilty to violating prevailing wage laws and pocketing almost $150,000 meant for their employees, Brooklyn District Attorney Ken Thompson announced Tuesday.
Prosecutors accused Arch Builders & Developers, Inc., located on East 17th Street near Avenue O, of underpaying four of its employees working at several local schools.
“These defendants got lucrative city contracts designed to assist small and minority-owned businesses and then shamelessly stole money from their own employees,” Thompson said in a press release. “In Brooklyn, we simply will not allow workers to have their hard earned wages stolen from them.”
The company pleaded guilty to second-degree grand larceny. The owners, Salma Rashid and Syed Rashid Shah, pleaded guilty to violating New York labor law, according to the DA’s office.
The construction company was awarded a $900,000 contract to work on three New York City School between November 2013 and March 2014, according to the DA’s press release. The schools are Junior High School 232K in East Flatbush, Public School 232Q in Queens and Public School 116M in Manhattan.
The contract required the company to pay its employees $62.79 per hour and $80.82 for overtime. Instead, investigators discovered the owners paid out between $100 and $130 per day without overtime compensation or benefits. The company took home $146,340.27 meant for their workers, prosecutors say.
“Prevailing wage fraud steals from New Yorkers who can least afford it,” said Department of Investigation Commissioner Mark Peters. “DOI’s investigation led to the arrest of the defendants and the return of $146,000 to individual workers.”
The defendants agreed to repay the stolen wages and are banned from receiving city contracts for five years. They also agreed to pay $15,000 to the city for the cost of the investigation, according to the DA’s office.