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American Copper, Steinway Tower contractors charged with fraud

Contractors hired to build Steinway Tower, the American Copper Building and several other high-profile Manhattan projects have been indicted for theft and fraud.

Manhattan District Attorney Cyrus Vance Jr. has accused the owners of Parkside Construction, brothers Francesco, 39, and Salvatore Pugliese, 46, and their associates of bilking their employees of more than $1.7 million and short-changing the state’s insurance fund $7.8 million in workers’ compensation.

The Pugliese brothers, their foreman James Lyons, 54, their payroll supervisor Yenny Duarte, 42, and two employees from Michigan-based Affinity Human Resources all face multiple felony charges in the indictment, including grand larceny and fraud.

“Amid Manhattan’s luxury building boom, sometimes it’s all too easy to overlook the human beings behind the scaffolding,” Vance said. “Construction workers are responsible for some of the most dangerous jobs in the city, and whether they’re working thousands of feet up in the air or twenty feet below ground-level, they deserve to be paid fairly and fully for their work.”

Between 2014 and 2017, Parkside doctored time sheets to reduce work hours recorded for at least 520 employees then submitted them to Affinity for processing, according to Vance’s indictment. The company also directed Affinity to issue “expense reimbursement” checks rather than payroll checks, hiding the fact that taxes and insurance fees were not being withheld.

Affinity owner Jerry Hamling, 57, and his employee, Michael DiMaggio, 58, were also indicted on felony counts of fraud and filing false documents.

While this was taking place, Parkside was contracted for concrete installation at masonry services at several major projects, including the Marriott Hotels at 215 Pearl Street, Steinway Tower at 111 W. 57th Street, American Copper Building at 626 First Avenue, Courtyard New York Downtown Marriott at 133 Greenwich Street, Hilton Garden Inn New York Times Square South at 326 W. 37th Street, DoubleTree by Hilton Hotel at 350 W. 40th Street, Public Hotel at 215 Chrystie Street and Jarmulowsky Bank Hotel at 9 Orchard Street.

At the same time, with help from Hamling and Affinity, Parkside hid roughly $42 million in payroll by telling the state that it had laid off its entire workforce and replaced it with contractors, a move that helped it avoid paying nearly $8 million to state’s insurance fund.

Vance is seeking a forfeiture order to collect $9.5 million from Parkside and Affinity to establish a victim compensation fund for the workers.

The District Attorney’s Office’s Rackets Bureau and Construction Fraud Task Force led a long-term probe into Parkside Construction along with the city’s Department of Investigations, the state’s Labor Department and Insurance Fund with assistance from the Port Authority and Business Integrity Commission.

“The defendants charged in this wage theft scheme played a long con with their employees, promising a decent wage but failing to deliver full paychecks,” DOI Commissioner Mark G. Peters said. “They flouted workers’ rights by stealing their wages and failing to pay them for the work they did, according to the charges. DOI, the Manhattan District Attorney’s Office, and our partners in the Construction Fraud Task Force will continue to investigate wage theft crimes in the construction industry and attempt to make whole those workers who were cheated out of their rightful pay.”

Building & Construction Trades Council President Gary LaBarbera praised the district attorney for exposing the corrupt firm.

“The Building Trades thanks Manhattan District Attorney Cy Vance for fighting against the egregious actions committed by these irresponsible contractors and looking out for hardworking New Yorkers,” LaBarbera said in a statement. “Unfortunately, wage theft and insurance fraud are all too common – especially among nonunion contractors. Worker exploitation and abuse should never be tolerated and we applaud the District Attorney’s commitment to ending wage theft and keeping unscrupulous employers accountable.”

Full charges in the indictment are as follows:

AFFINITY HUMAN RESOURCES, LLC
Rochester Hills, MI

Charged:
• Insurance Fraud in the First Degree, a class B felony, 2 counts
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Penalties for Fraudulent Practices, a class D felony, 5 counts
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Offering a False Instrument for Filing in the First Degree, a class E felony, 4 counts
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

MICHAEL DIMAGGIO, D.O.B. 11/27/1959
Holbrook, NY

Charged:
• Insurance Fraud in the First Degree, a class B felony, 2 counts
• Penalties for Fraudulent Practices, a class D felony, 12 counts
• Offering a False Instrument for Filing in the First Degree, a class E felony, 12 counts

YENNY DUARTE, D.O.B. 9/12/1975
Queens, NY

Charged:
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

GS&F ENTERPRISES LLC
Queens, NY

Charged:
• Insurance Fraud in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Penalties for Fraudulent Practices, a class D felony, 2 counts
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Offering a False Instrument for Filing in the First Degree, a class E felony, 2 counts
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

JERRY HAMLING, D.O.B. 5/21/1960
Rochester Hills, MI

Charged:
• Insurance Fraud in the First Degree, a class B felony, 2 counts
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Penalties for Fraudulent Practices, a class D felony, 4 counts
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Offering a False Instrument for Filing in the First Degree, a class E felony, 3 counts
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

JAMES LYONS, D.O.B. 8/10/1963
Glenham, NY

Charged:
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

PARKSIDE CONSTRUCTION BUILDERS CORP.
Queens, NY

Charged:
• Insurance Fraud in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Penalties for Fraudulent Practices, a class D felony, 3 counts
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Offering a False Instrument for Filing in the First Degree, a class E felony, 2 counts
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

PARKSIDE CONSTRUCTION CONTRACTORS INC.
Queens, NY

Charged:
• Insurance Fraud in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Penalties for Fraudulent Practices, a class D felony, 3 counts
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Offering a False Instrument for Filing in the First Degree, a class E felony, 3 counts
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

FRANCESCO PUGLIESE, D.O.B. 12/16/1978
Queens, NY

Charged:
• Insurance Fraud in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Penalties for Fraudulent Practices, a class D felony, 3 counts
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Offering a False Instrument for Filing in the First Degree, a class E felony, 3 counts
• Grand Larceny in the Fourth Degree, a class E felony, 1 count

SALVATORE PUGLIESE, D.O.B. 3/3/1972
Roslyn Heights, NY

Charged:
• Insurance Fraud in the First Degree, a class B felony, 2 counts
• Penalties for Fraudulent Practices, a class D felony, 5 counts
• Offering a False Instrument for Filing in the First Degree, a class E felony, 4 counts

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