Pennsylvania contractor agrees $20m restitution for wage theft

A Pennsylvania construction firm yesterday made no-contest pleas to charges of theft and agreed to pay some $20.6m in stolen wages back to over a thousand workers.

Pennsylvania’s Attorney General’s office called it "the largest prevailing wage criminal case in U.S. history".

Glen O Hawbaker Inc. is one of the biggest contractors working for the state, having carried out some $1.7bn worth of transport and other contracts between 2003 and 2018, the Attorney General said.

"A month ago I met with some of the men and women who had their wages and retirements stolen by Hawbaker – and I told them that we will do everything we can to get them every cent they are owed under the law. A few minutes ago, I was able to tell them that we made good on that promise," said Attorney General Josh Shapiro (pictured).

"We took on one of the largest construction companies in the state, and now 1,267 people will have a better shot at retirement; they will get the paychecks they earned under the law; and they will have their work and their livelihoods protected and respected, instead of ignored."

Hawbaker pleaded nolo contendere to four felony counts relating to violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act.

A nolo contendere plea stops short of admitting guilt but accepts the sentence.

According to the Attorney General, Hawbaker used money intended for prevailing wage workers’ retirement funds to contribute to retirement accounts for all Hawbaker employees – including the owners and executives.

It was also charged with stealing funds intended for prevailing wage workers’ health and welfare benefits, and using them to subsidize the cost of the self-funded health insurance plan that covers all employees, the Attorney General said, adding that the company disguised its scheme by artificially inflating its costs by millions of dollars each year and claiming credit for prohibited costs.

Charges of theft were brought in April after a three-year investigation by authorities in Pennsylvania.

According to local news outlet Centre Daily, Hawbaker issued a statement saying the decision to plead no contest was taken to avoid "protracted litigation, which could have jeopardised the livelihoods of our dedicated employees".

The statement added that the company still believed it had followed "all requirements regarding fringe benefits".

Image: Pennsylvania Attorney General Josh Shapiro (United States Department of Justice/Public domain)

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