Owner Of Applied Construction Inc. And Two Others Arrested On 29-Count Indictment Charging Grand Larceny, Scheme To Defraud And Money Laundering
Schneiderman: Owner Who Required Workers To Pay Kick Backs Is Now Facing Criminal Charges
NEW YORK – March 6, 2013 – (RealEstateRama) — Attorney General Eric T. Schneiderman today announced the arrest and arraignment of Mohammad T. Riaz, the owner of Applied Construction Inc., and two of his employees for failing to pay hundreds of thousands of dollars in wages to his workers. Hired to complete a restoration project in the Bronx financed and overseen by the New York City Department of Housing Preservation and Development (HPD), Riaz and his two employees on the project are charged with scheming to avoid prevailing wage laws by underpaying workers with cash payments, failing to provide supplemental benefits to workers and directing some workers to return portions of their wages. They face felony grand larceny charges and up to 15 years in prison.
“Contractors who work on affordable housing cannot ignore New York State’s labor laws,” Attorney General Eric Schneiderman said. “My office will bring charges, including criminal cases when appropriate, against companies that violate these important worker protections. These defendants broke the law and will be brought to justice.”
Applied Construction Inc., based at 677 Morris Park Avenue in the Bronx, and its owner, manager and foreman were required by law and by their contract with the city to pay prevailing wages to workers on an affordable housing project located at 2865 Kingsbridge Terrace in the Bronx between November 9, 2011 and August 30, 2012. Rather than pay the workers at the legally-required hourly rates, Riaz, Mohammad Arshad and Zbigniew “Ziggy” Lakomiec paid the workers a fraction of the lawful rate and did not provide supplemental benefits.
To conceal their scheme, the men underpaid some of their workers by paying them in cash and excluding those workers on certified payroll reports submitted to HPD as a condition of payment. In addition, some workers who were listed on the reports were given the amount of money as listed on the certified payroll reports but were then required to return a portion of their wages to the defendants each week.
The defendants are:
Mohammad T. Riaz, 34, owner, of Westbury
Mohammad Arshad, 39, manager, of Hicksville
Zbigniew “Ziggy” Lakomiec 58, foreman, of Brooklyn
All of the defendants are charged with Grand Larceny in the Second Degree, which carries a maximum term of 5 to 15 years in prison. Riaz is also charged with three counts of Money Laundering in the Second Degree. Other charges include Scheme to Defraud, Falsifying Business Records, and Offering a False Instrument for Filing and Violation of Workers Compensation Law.
The men were arraigned in Bronx Supreme Court in front of Justice Richard Lee Price Wednesday.
The project, funded in part with taxpayer dollars, was administered by New York City’s Department of Housing Preservation and Development and was subject to prevailing wage requirements.
This case was investigated by New York State Office of the Attorney General Associate Auditor Percy Corcoran and Investigator David Negron under the supervision of Supervising Investigators John Sullivan and John Serrapica, Deputy Chief John McManus, Supervising Investigator Kenneth Morgan and Deputy Chief Vito Spano.
The case is being prosecuted by Assistant Attorneys General Felice Sontupe and Meredith McGowan under the supervision of Bureau Chief Terri Gerstein of the Labor Bureau. The case is being overseen by Executive Deputy Attorney General for Criminal Justice Kelly Donovan and First Deputy of Affirmative Litigation Janet Sabel.
The charges are accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.
Contact:
New York City Press Office: (212) 416-8060
Albany Press Office: (518) 473-5525
nyag.pressoffice (at) ag.ny (dot) gov
Twitter: @AGSchneiderman
