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Queens construction company, payroll firm underpaid workers: Manhattan DA

The Manhattan district attorney charged executives from Parkside Construction and Affinity HR with wage theft and insurance fraud at construction sites such as 111 57th St., right, on Wednesday, May 16, 2018. Photo Credit: Craig Ruttle

Prosecutors unveiled charges Wednesday against a Queens construction company and an external payroll firm that allegedly committed workers’ compensation fraud and underpaid 520 laborers while contracted to work on several Manhattan projects, including a Billionaires’ Row condo.

Parkside Construction and Affinity Human Resources underpaid workers $1.7 million and committed $7.8 million in workers’ compensation insurance fraud between 2014 and 2017, Manhattan District Attorney Cyrus Vance Jr. said at a news conference.

The two companies and some of their executives and employees were charged in two separate indictments, and all pleaded not guilty during arraignments at Manhattan Supreme Court Wednesday.

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Officials at the news conference said employees performing these types of work — many of whom are undocumented immigrants — earn an average of $25 an hour. One laborer had nearly $50,000 in earned wages withheld from him over a three-year period, according to Mark Peters, commissioner of the city’s Department of Investigation.

“You would think there would be enough money there to fairly compensate the hundreds of workers they hired to perform concrete installation and masonry projects, which are among the most dangerous in this industry. Instead, Parkside Construction has been charged with systematically altering their workers’ timesheets, lowering their reclaimed wages and then submitting the falsified time sheets to Affinity Human Resources,” Vance said at a news conference. “This was the business model for these defendants. These alterations were purposeful, calculated and consistent.”

Parkside Construction and Affinity Human Resources, as well as executives at the companies, have been charged with insurance fraud, grand larceny and scheming to defraud, according to indictments.

Parkside Construction’s attorney, Scott Leemon, released a statement from the firm’s co-owner, Francesco Pugliese, 39, of Queens, denying committing any wage or other kind of theft.

“We have known about this investigation for over a year and look forward to showing the DA’s office and investigators why they are wrong in filing these charges against Parkside and other individuals that were indicted,” the statement read.

Affinity Human Resources and its attorney did not immediately respond to requests for comment.

Vance’s office said Parkside personnel allegedly underreported $42 million in payroll to the New York State Insurance Fund with Affinity’s help, therefore keeping its coverage premiums artificially low and evading some $7.8 million in insurance dues.

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Officials said this occurred as the construction firm had contracts on some of the most costly projects in the city, including JDS Development Group and Property Markets Group’s luxury residential skyscraper at 111 W. 57th St. in Manhattan. These developers and others associated with the projects that Parkside Construction worked on have not been charged in the cases.

“We are saying to those in the construction industry who take advantage of their employees at the expense of the employees’ safety that you cannot hide the work that you are doing that defrauds your employees; you cannot hide behind out-of-state PEOs (professional employer organizations) and other vendors to avoid your responsibility to your workers,” Vance said.

Peter Tilem, an attorney for James Lyons, 54, a supervising foreman at Parkside Construction, said his client is a working man who may be in a vulnerable position due to his company’s actions.

“He’s not a wealthy guy. He’s a man who was working for a company that may or may not be corrupt,” Tilem said.

Attorneys for others charged in the alleged schemes did not immediately return requests for comment.