Laborers on a ‘Billionaires’ Row’ Tower Cheated of Wages, DA Says
Posted May 16, 2018 11:11 p.m. EDT
NEW YORK — The laborers were doing concrete work on the luxury Steinway Tower on West 57th Street, a needlelike skyscraper set to open next year full of condominiums for some of the world’s wealthiest people. But the company employing the $25-an-hour workers, the authorities said, was cheating them out of hundreds of thousands of dollars in wages by shorting their hours and failing to pay them overtime.
The Manhattan district attorney, Cyrus Vance Jr., said Wednesday that the company, Parkside Construction, and its affiliates stole more than $1.7 million in wages over three years from about 520 workers at the tower and seven other high-rise buildings. The company also hid nearly $42 million in wages from state insurance officials to avoid paying millions in workers’ compensation premiums.
Many of the workers were unauthorized immigrants from Mexico and Ecuador, Vance said. When the workers complained, they were falsely told the money would be in their next check or were encouraged to find work elsewhere.
At a news conference announcing charges, Vance said the victims were especially vulnerable to exploitation because they were not in unions and did not have immigration papers. “Often it’s the very people who are tasked with building this great city who are the most vulnerable to fraud from their managers and employers,” Vance said.
Parkside Construction and its co-owners — Francesco Pugliese, 39, and Salvatore Pugliese, 46 — were charged with grand larceny, insurance fraud and scheme to defraud. Also charged were Parkside’s construction foreman, James Lyons, 54; its payroll manager, Yenny Duarte, 42; an outside accountant, Michael Dimaggio, 58; and the owner of a Michigan payroll company, Jerry Hamling, 57. The Pugliese family’s companies made more than $100 million off the masonry and concrete contracts for the eight buildings.
“This was a business model for these defendants,” Vance said.
Five of the six defendants appeared Wednesday before Justice Gregory Carro in state Supreme Court in Manhattan. After pleading not guilty, they were released on bail. Hamling, who could not be reached Wednesday for comment, is expected to appear in court Monday.
Scott Leemon, a lawyer for Parkside Construction, said the company denies the charges. “We have known about this investigation for over a year and look forward to showing the district attorney’s office why they are wrong in filing these charges,” he said.
James Rogers, the state Labor Department’s deputy commissioner for worker protection, said the arrests highlighted an underbelly to the construction boom in New York: the exploitation of immigrant construction workers to satisfy the greed of contractors.
“These defendants were building some of the most expensive real estate in the world, and the victims were low-wage workers, just scraping by,” he said. Still, the defendants wanted more, Rogers said. “They wanted millions more, and they stole those millions from New York state’s most vulnerable workers.”
The condominiums in the Steinway Tower, a 1,428-foot-tall building going up in an area known as “Billionaires’ Row,” start at $7 million and go up to $59 million for the most expensive penthouse, according to CityRealty.com, a real estate listings and research company. Condominiums on high floors are between $20 million and $30 million. All told, the developers expect to reap $1.45 billion from sales.
The general contractor and developer for the building, JDS Development Group, was not charged in the indictments unsealed Wednesday. Prosecutors said they have no evidence that officials at JDS were aware of the wage theft by Parkside and its affiliates. Vance said the investigation was continuing. A spokesman for JDS did not respond to messages left by a reporter.
Prosecutors said Parkside Construction tracked workers’ hours with face-recognition machines and with manual time sheets. But supervisors would write in fewer total hours next to the workers’ names on printouts that were submitted to the outside payroll company, which cut the checks.
Diana Florence, the assistant district attorney who oversees a construction-fraud task force, said the investigation started with a tip from a carpenters’ union. The city’s Department of Investigation played a large role in building the case, interviewing dozens of workers — many of whom were reluctant witnesses because of their immigration status — and executing four search warrants, said Mark Peters, the DOI commissioner.
The financial pain felt by the workers was significant, prosecutors said, with one laborer losing $50,000 over three years.
Labor organizers who have tried to unionize the Steinway Tower job site said workers have complained for months about payroll delays and about facing dismissal if they demanded payment.
“There is a constant turnover of workers,” said Reinaldo Torres, an organizer with the Sheet Metal Workers Local No. 28. “There is so much worker abuse going on it’s mind-boggling.”