OWNER OF START ELEVATOR SENTENCED IN MANHATTAN FEDERAL COURT TO TWO YEARS IN PRISON FOR PARTICIPATING IN A SCHEME TO UNDERPAY EMPLOYEES AND DEFRAUD NYCHA
FOR IMMEDIATE RELEASE
Friday March 2, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOHN O’SHEA, the owner and president of Start Elevator, Inc. (“Start Elevator”), was sentenced today in Manhattan federal court to two years in prison for his participation in a scheme to underpay employees of his company. On September 15, 2011, O’SHEA pled guilty to one count of mail fraud and one count of false statements. He was sentenced today by U.S. District Judge Alvin K. Hellerstein.
According to the Indictment to which O’SHEA pled and other court documents:
Start Elevator had federally-funded contracts with the New York City Housing Authority (“NYCHA”) to repair, maintain, and modernize elevators at housing developments for low-income individuals throughout the City. Each of these contracts required that Start Elevator pay the federal prevailing wage to its employees and provide certified payrolls to NYCHA. NYCHA relied on these payrolls to reimburse Start Elevator for the work its employees performed.
From 2002 through 2007, O’SHEA filed certified payrolls that were in fact false because they overstated to NYCHA the actual payments made to his employees. For example, although the lowest applicable federal prevailing wage for Start Elevator employees working on NYCHA contracts was $39.23 per hour for mechanics and $23.51 for apprentices, O’SHEA paid numerous mechanics as little as $12.86 per hour apprentices $12.00 per hour. During this period, Start Elevator employees working pursuant to NYCHA contracts were underpaid by O’SHEA by more than $1 million.
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In addition to the prison term, Judge Hellerstein sentenced O’SHEA, 47, of Bronxville, New York, to three years of supervised release. O’SHEA was also ordered to pay $1,098,282.52 in restitution, a $250,000 fine, and a $200 special assessment fee.
Mr. Bharara praised the investigative work of the New York City Department of Investigation and NYCHA in this investigation.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorney Steve C. Lee is in charge of the prosecution.