Pennsylvania Builders Facing Fraud, Theft Charges for Misclassification of Workers

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From the Delaware County Daily Times, Alex Rose reports that two men have been charged with misclassifying workers as independent contractors. Alex writes:

MEDIA — Two co-owners of a local construction business have been arrested on numerous criminal charges including the alleged misclassification of workers and defrauding the Delco Strong grant program aimed at assisting struggling companies during the COVID-19 pandemic.

Brian McGarrity, 40, of the 1000 block of Bon Air Road in Havertown, and Christopher Flanagan, 45, of the 8300 block of Delaware Avenue in Upper Darby, are both charged with workplace misclassification, making false statements, theft, receiving stolen property, deceptive business practices, insurance fraud, worker’s compensation fraud and conspiracy.

“When contractors misclassify workers, they are stealing on the hour, every hour,” said state Attorney General Josh Shapiro at a press conference outside the County Courthouse Thursday announcing the charges. “They’re taking wages and denying benefits, and often failing to provide workplace protections to people who are in need. That theft … causes real pain, causes real suffering.”

The two men are owners of Havertown-based Mid Ulster Construction LLC, which has performed work on numerous sites in and around Delaware County, including the Media Townhouse restaurant, an Amazon GO store in Haverford and the Tri-State Mall in Delaware, where two employees were seriously injured in December, according to an affidavit of probable cause written by Delaware County Detective Michele Deery. The affidavit notes Mid Ulster and Flanagan are also listed on a public records database as part owners of the Townhouse.

One of the two injured men, Sean Hughes, an Irish national who worked for Mid Ulster for approximately two years, is currently in hospice care and has been unresponsive since doctors reattached his skull earlier this year, the affidavit says. Another man suffered broken ribs and other injuries as a result of the fall. The two men were working approximately 20 to 30 feet off the ground with no fall protections in place, according to the affidavit.

“It is a stark reminder of those who are truly harmed by unscrupulous employers: The workers themselves,” said county District Attorney Jack Stollsteimer. “We cannot tolerate business practices that ignore the legal requirements for contractors and leave their workers vulnerable to this sort of tragedy.”

Deery spoke with numerous employees who received 1099 tax forms from Mid Ulster indicating they were “independent contractors” when they were actually employees who were paid in cash or checks with no tax withholdings taken out, the affidavit says.

Shapiro said this is a common tactic for businesses looking to dodge paying medical insurance, unemployment compensation, workers compensation, income tax and other benefits and wages. He noted that it not only impacts workers, but local schools and governments that do not receive taxes as well, reducing their ability to provide services to residents.

Read the full story at Local builders facing fraud, theft charges for misclassification of workers | News | delcotimes.com

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