Gary Woltmann, the president of Woltmann Associates, who previously pleaded guilty to 20 counts of Tax Evasion while employing undocumented workers off-the-books has been arrested again. This time for 2 counts of felonious Workers' Compensation fraud.
From Workers Compensation Info.com:
...allegedly used an off-the-books payroll scheme to avoid paying $150,000 in workers' compensation premiums to his insurer, American International Group, in the policy years 2002-2003 through 2006-2007. He also allegedly defrauded New York State out of $36,000 in payroll taxes.Go Suffolk County District Attorney Thomas Spota, who I have met and shaken hands with when at a union meeting he explained hi NY Spota bill, which has passed the Senate and is as far as little birdies tell me is "in limbo with Gov. Spitzer"
Woltmann faces two Class E felonies: one count each of fraudulent practices and offering a false instrument for filing in the first degree. Under New York state penal law and workers' compensation law, businesses with employees must carry insurance to cover workers who may be injured on the job. These charges are punishable by one and a third to four years in prison, fines up to $50,000, and restitution.
"Protecting employees with workers' compensation insurance is not optional in New York," Chair Zachary S. Weiss said. "When employers avoid that insurance, they're jeopardizing their workers, and counting on honest businesspeople to bail them out."
On Sept. 17, 2007, Woltmann pleaded guilty to 20 charges that he avoided $220,000 in federal payroll taxes in this same case. While he has not been sentenced yet, he faces 21 to 27 months in prison under federal sentencing guidelines for that offense. Woltmann will also repay those federal payroll taxes.
"The charges in the federal case alerted us to the possibility of the workers' compensation case," Fraud Inspector General John Burgher said. "This is the result of cooperation between state, county and federal entities."
The Board was brought into the investigation last May by the office of Suffolk County District Attorney Thomas Spota. It worked with that office and the Internal Revenue Service Criminal Investigations Division in both these investigations.
"Workers' compensation is a lifeline for injured workers who are physically unable to earn an income," Thomas Spota said. "The goal of our partnership with the Workers' Compensation Board and federal law enforcement is to protect New Yorkers from the higher operating costs, higher prices for goods and services, and higher insurance premiums that result from insurance fraud."
In 2006, investigations by the Workers' Compensation Board Office of the Fraud Inspector General resulted in 119 arrests and prosecutions, while the Compliance unit referred another 113 prosecutions to the attorney general. The Board also returned a record $6.2 million to victims of fraud.
The charges in this case are merely accusations and the defendant is presumed innocent unless and until proven otherwise by a court of law. The Workers' Compensation Board equitably and fairly administers the provisions of the New York State Workers' Compensation Law on behalf of New York's injured workers and their employers. To report workers' compensation fraud, call 888-363-6001.
(1)...tighten loopholes in New York State's Labor Law.Why it's sitting unsigned on Mr.Spitzers desk is beyond reasoning. He had done well with his Executive order against Misclassification of Workers.
Clarifying the responsibilities of contractors' and subcontractors to comply with the statute, tightening local government's record-keeping obligations and increasing penalties for offenders are some of the changes under
Specifically, the legislation provides provisions which:
- Treat the theft of prevailing wages from workers similarly to other thefts under the penal law.
- Require that certified payrolls be filed and that the willful failure to file them is a felony.
- Strengthen the responsibility of government agencies awarding contracts by requiring that an individual in each agency be designated to receive, collect and review certified payrolls and that, in the event an agency fails to designate such an individual, the buck stops at the desk of the chief policy-maker of the agency, establishing plain and unavoidable accountability.
- Require that when the spread between the low bidder and the second low bidder is 10% or more, or when the low bidder has been involved in a prior prevailing wage violation, the low bidder must submit a sworn statement and detailed cost estimate attesting to the fact that the prevailing wage law will be complied with, including a personal guarantee to make up any under-payments of prevailing wages and an agreement on cases where liability is determined to cover government investigative and enforcement costs and court and enforcement costs incurred by aggrieved workers and entities.
(2) One would think that our previous NY State administration would have at least taken interest in the economic burden being placed on its citizens yet, nothing was done. It seemed *ESRCC representatives were swimming against an incoming tide. With the election of Eliot Spitzer as Governor however, the “big stick” ESRCC reps needed arrived. As New York State Attorney General, Spitzer had brought enforcement actions against employers guilty of misclassification. When he received the Cornell study on the economic result of misclassification, once again he did not hesitate to act. Within seven months of the study’s release he announced an interagency task force that, for the first time in New York State, all interested state parties would be required to share information regarding contractors guilty of payroll violations. Laws are now being enforced. Those contractors who would erode our quality of life are being convicted. Bid fields are leveling out and conscientious contractors are able to compete. This all translates into more work for ESRCC members, more contributions to retirement and health care plans, anda more stable economy for New York State.Elliot Spitzer should step up once again and sign the Spota Bill, helping to end the sweatshop construction practices here in NY.
*Eastern State Regional Council of Carpenters
(1) NYS Building and Construction Trades Council
(2) NYS Carpenters.com PDF file
Original Story at UnionReview:
NY: Contractor Convicted - Paying Immigrant Carpenters Off The Books