Two Electrical Contractors Arrested in $200,000 Labor Scam

Attorney General Eric Schneiderman announced the arrests of the owners of Staten Island electrical contractor R3 Electrical, Inc., on felony grand-larceny charges. The owners and the company are charged with failing to pay more than $200,000 in legally required wages on projects upgrading the science labs at five City University of New York campuses and boilers at the city-run Rutgers Houses on Manhattan’s Lower East Side. If convicted, the contractors face up to 15 years in prison.

R3 Electrical, located at 541 Port Richmond Avenue, were hired as an electrical subcontractor on the 2008-2009 CUNY project and then on a 2009 job funded by the New York Power Authority to upgrade the boilers at the Rutgers Houses, a New York City Housing Authority development.

The owners, Ronald Bartiromo and Raymond D’Auria were arrested on four felony charges, including grand larceny and violation of labor law.

The two allegedly underpaid at least seven employees who repaired science labs at five City University of New York campuses, and at the lower East Side housing project.

Both projects were funded by taxpayers.

New York Labor Law and the contract terms for both projects required the defendants to pay prevailing wages and to submit certified payroll reports showing all hours worked and wages paid. The defendants failed to pay the legally-required wages on both projects to at least seven employees, who worked as electricians, resulting in total underpayments of over $200,000.

The defendants submitted payroll reports to CUNY and NYPA falsely claiming they paid all the workers on the project the required wage. That underpayment was taxpayer dollars that should have gone to the workers.

The 48-year-olds allegedly pocketed the money, and then falsely reported their incomes on their federal and state tax returns.

The defendants were arraigned in Manhattan Criminal Court, each charged with:

(2) counts of Grand Larceny in the Second Degree, a Class "C" felony;
(2) counts of Violation of Labor Law, a Class "C" felony
(20) counts of Offering a False Instrument for Filing in the First Degree, a "D" felony
(20) counts of Falsifying Business Records in the First Degree, a Class "E" felony.

Both face a prison term up to 15 years.
The company faces the same charges and fines of up to $10,000 on each count.

New York's prevailing wage laws seek to ensure that government contractors pay wages and benefits that are comparable to the local norms for a given trade.

Schneiderman promised to come after “government contractors who cheat their employees and falsify records as they attempt to conceal their misdeeds. Protecting taxpayer dollars and the livelihoods of hard-working New Yorkers is a priority for this office."