Demolition Company Operators Found Guilty In Manhattan Federal Court Of Scheme To Underpay Employees In Violation Of Federal Prevailing Wage Law
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOVER NARANJO, the owner and president of Enviro & Demo Masters, Inc. (“Enviro”), and LUPERIO NARANJO, SR., a foreman for Enviro, were found guilty today in Manhattan federal court of perpetrating a scheme to underpay employees in violation of the federal prevailing wage law. The jury also found that JOVER NARANJO and LUPERIO NARANJO, SR., tampered with witnesses and used other people’s identities to further their fraudulent scheme. In addition, the jury found that JOVER NARANJO made false statements to a government agent in connection with the scheme. They were convicted after a two-week trial before U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “Today, Jover Navanjo, and Luperio Naranjo, Sr. stand convicted of deceiving government agencies through fraudulent payrolls that hid the unlawful underpayment of their employees, and then concealing their fraud. The Office has zero tolerance for contractors who unlawfully take advantage of their staff, abuse federal funds, and then lie about it to cover their tracks. With today’s verdict, Jover Naranjo and Luperio Naranjo, Sr., will be punished for their conduct.”
According to the Complaint and the Superseding Indictment filed in Manhattan federal court and the evidence presented at trial:
In August 2009, Enviro was awarded a sub-contract by the general contractor on a New York City project (the “Project”) to demolish five buildings in Manhattan (the “Contract”) that was funded in part with federal stimulus money. From August 2009 through February 2010, JOVER NARANJO and LUPERIO NARANJO, SR., participated in a scheme to submit fraudulent certified payrolls to the New York City Department of Housing Preservation and Development (“HPD”) and the U.S. Department of Labor in connection with the Contract. These certified payrolls were fraudulent in at least three respects. First, they listed relatives as the demolition workers on the Project, when in fact, these relatives did no work. Second, the certified payrolls did not list the actual individuals who worked on the Project. Third, the certified payrolls misrepresented the wages being paid to Enviro’s workers.
In this regard, the fraudulent certified payrolls indicated that Enviro was paying its employees the federal prevailing wage, as required by federal law, but in reality, they were being paid far less. Although the applicable federal prevailing wages for Enviro employees working on the Contract were approximately $49 and $33 per hour for demolition laborers, JOVER NARANJO and LUPERIO NARANJO, SR., paid their demolition workers as little as $13 per hour. The total amount of salary underpaid by the defendants to Enviro employees working on the Contract was in excess of approximately $650,000.
JOVER NARANJO and LUPERIO NARANJO, SR., also employed a number of measures to conceal their fraud. For example, they submitted supporting documentation with the certified payrolls that included time sheets on which they forged workers’ signatures, and canceled checks that they had doctored to make it appear that workers were earning the prevailing wage. In addition, they hid their workers from investigators and told some to lie about their identities, work schedules, and/or pay rates if they were questioned by investigators. When an employee truthfully told investigators that the employee was paid below the prevailing wage, JOVER NARANJO and LUPERIO NARANJO, SR., fired the employee and the employee’s relative.
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JOVER NARANJO, 37, and LUPERIO NARANJO, SR., 65, both of Queens, New York, were each convicted of mail fraud, conspiracy to commit mail fraud, witness tampering, conspiracy to commit witness tampering, and aggravated identity theft. JOVER NARANJO was also convicted of one count of making false statements.
JOVER NARANJO faces a total maximum sentence of 87 years in prison, including a mandatory minimum sentence of two years. LUPERIO NARANJO, SR., faces a total maximum sentence of 82 years in prison, including a mandatory minimum sentence of two years. The defendants also each face a maximum fine of $250,000 or twice the gross gain or loss from the offense on each count except aggravated identity theft.
The defendants are scheduled to be sentenced by Judge Rakoff on March 24, 2014 at 4:00 p.m.
Mr. Bharara praised the outstanding investigative work of the New York Field Office of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, the New York City Department of Investigation, and the United States Environmental Protection Agency Criminal Investigation Division.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Brian A. Jacobs and Brent S. Wible are in charge of the prosecution.