Demolition Company Operators Sentenced In Manhattan Federal Court For 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 sentenced today in Manhattan federal court to six and four years in prison, respectively, for perpetrating a scheme to underpay employees in violation of the federal prevailing wage law and for tampering with witnesses and using other people’s identities to further this scheme. Both defendants were convicted in November 2013 after a two-week trial before U.S. District Judge Jed S. Rakoff, who imposed today’s sentences.
Manhattan U.S. Attorney Preet Bharara said: “Today’s sentences ensure Jover Naranjo and Luperio Naranjo, Sr., will pay a steep price for underpaying their staff, abusing federal funds, and then lying to cover it all up – loss of their liberty.”
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 Upper 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, depending on their specific job responsibilities 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 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.
JOVER NARANJO, 37, of Queens, New York, was also sentenced to three years of supervised release, and ordered to pay a $600 special assessment fee. LUPERIO NARANJO, SR., 65, of Queens, New York, was also sentenced to three years of supervised release, and ordered to pay a $500 special assessment fee. Forfeiture and restitution for both defendants will be determined at a later date
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, 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.