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Contractor Accused of Cheating Bronx Workers Out of Thousands in Pay

By Patrick Wall | March 7, 2013 7:49pm
 The owner and two employees of Applied Construction were charged on Wednesday, March 6, 2013 with cheating workers out of thousands of dollars.
The owner and two employees of Applied Construction were charged on Wednesday, March 6, 2013 with cheating workers out of thousands of dollars.
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Flickr/Linus Henning

BRONX SUPREME COURT — A contractor cheated workers on a Bronx affordable housing project out of hundreds of thousands of dollars in a scheme that involved under-the-table payments and fraudulent payroll reports, according to New York State Attorney General Eric Schneiderman.

Mohammad Riaz, 34, owner of Bronx-based Applied Construction, allegedly paid bricklayers and laborers on a city-funded repair project at a Van Nest affordable housing development vastly less than the law required and did not provide them benefits, according to an indictment filed in Bronx Supreme Court.

Riaz and two employees who assisted him tried to cover their tracks by paying some workers in cash and by demanding that others return part of their weekly paychecks once the company filed the check receipts and payroll forms with the city, the indictment said.

“Contractors who work on affordable housing cannot ignore New York State’s labor laws,” Schneiderman said in a statement. “These defendants broke the law and will be brought to justice.”

The two employees who were arrested along with Riaz are manager Mohammad Arshad, 39, and foreman Zbigniew “Ziggy” Lakomiec, 58.

The three men were arraigned Wednesday and charged with grand larceny, money laundering, wage kickbacks, falsifying business records and other charges.

Each could face up to 15 years in prison on the felony grand larceny charges.

Riaz's attorney, Michael Soshnick, did not immediately respond to a phone message Thursday.

The Department of Housing Preservation and Development funded and oversaw work the company did on the roof and façade of an affordable co-op building at 2865 Kingsbridge Terrace between November 2011 and August 2012.

Because the project received taxpayer money, the company was required pay its workers prevailing construction wages plus benefits, or $72.44 per hour for the bricklayers and $65.69 per hour for the laborers.

Instead, the workers were paid between $12 and $20 per hour with no benefits, the indictment said.

Riaz and his alleged accomplices excluded workers they paid in cash from payroll forms that they were required to submit to the city, the indictment said.

Workers who were included on the payroll forms and issued checks at the proper rates were forced to return much of their paychecks to the company, the indictment added.

“It is unacceptable for any contractor to target and abuse its employees, and there is no room on HPD projects for those who would perpetrate such acts,” said agency spokesman Eric Bederman. “We require that contractors uphold all labor laws, and those who think they can game the system and skirt the law should be punished accordingly.”

The agency began working with investigators in the attorney general's office last spring as they built a case against the contractor and his two employees.

The men are due back in court on May 28.