A New York payroll processing company and a construction firm have been charged with wage theft and insurance fraud for a scheme that is alleged to have netted them nearly US$10 million.
Manhattan District Attorney Cy Vance claimed that, instead of paying construction workers what they earned, the owners of Parkside Construction conspired with Affinity Human Resources to cheat at least 520 workers out of more than US$1.7 million in wages and benefits between 2014 and 2017.
In order to keep track of what employees were earning, Parkside used facial recognition software on its sites to record their hours worked. But printouts from the time-keeping machines were later altered and updated with lower weekly hours than those actually worked, Vance attested.
According to the New York Daily News, the falsified timesheets were then submitted for processing to Affinity, which paid some workers' wages using “expense reimbursement” cheques to hide the fact the true nature of the payments. The scheme enabled the companies to avoid paying withholding taxes and unemployment insurance contributions.
Parkside was sued by a number of employees in 2015 over the same issue.
But on this occasion, it also hid more than US$40 million in payroll from the New York State Insurance Fund to maintain workers' compensation coverage at fraudulently low premiums.
In New York State, employers are required to maintain compensation coverage for all employees, with premiums based on the level of payroll and the type of work performed by their workers. But after making numerous false statements and submissions, Parkside failed to report more than US$42 million related to payroll, thereby evading more than US$7.8 million in insurance premiums.
Charges against the executives named in the scheme include insurance fraud and grand larceny. A civil forfeiture action has also been taken out to recoup the stolen money.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
A New York payroll processing company and a construction firm have been charged with wage theft and insurance fraud for a scheme that is alleged to have netted them nearly US$10 million.
Manhattan District Attorney Cy Vance claimed that, instead of paying construction workers what they earned, the owners of Parkside Construction conspired with Affinity Human Resources to cheat at least 520 workers out of more than US$1.7 million in wages and benefits between 2014 and 2017.
In order to keep track of what employees were earning, Parkside used facial recognition software on its sites to record their hours worked. But printouts from the time-keeping machines were later altered and updated with lower weekly hours than those actually worked, Vance attested.
According to the New York Daily News, the falsified timesheets were then submitted for processing to Affinity, which paid some workers' wages using “expense reimbursement” cheques to hide the fact the true nature of the payments. The scheme enabled the companies to avoid paying withholding taxes and unemployment insurance contributions.
Parkside was sued by a number of employees in 2015 over the same issue.
But on this occasion, it also hid more than US$40 million in payroll from the New York State Insurance Fund to maintain workers' compensation coverage at fraudulently low premiums.
In New York State, employers are required to maintain compensation coverage for all employees, with premiums based on the level of payroll and the type of work performed by their workers. But after making numerous false statements and submissions, Parkside failed to report more than US$42 million related to payroll, thereby evading more than US$7.8 million in insurance premiums.
Charges against the executives named in the scheme include insurance fraud and grand larceny. A civil forfeiture action has also been taken out to recoup the stolen money.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
