Pennsylvania’s Attorney General, Josh Shapiro, has charged a contractor with theft, primarily for failing to pay workers’ required benefits. The Attorney General’s office has been putting particular focus on construction companies working on public projects, and the illegal practices that are used to lower their bids.
The attorney general’s office filed charges against Glenn O. Hawbaker Inc. with a district judge near its headquarters in State College, accusing the company of stealing more than $20 million from workers’ fringe benefits such as retirement, health insurance, life insurance and paid leave.
The company “fleeced workers in order to put more money back into their pockets,” Attorney General Josh Shapiro said at a news conference. “They defrauded taxpayers who ultimately paid for these projects, and cost honest companies a fair shot at these bids.” …
Prosecutors claimed the company hid the diversion by artificially inflating benefits records by millions of dollars annually and by taking credit for costs that do not count toward the prevailing wage standards. They said the company has apparently used the practice for decades, but time limits for criminal charges limited the allegations to the past five years.
In the arrest affidavit, investigators said the company blamed bad advice from a former company lawyer for the decision to use prevailing wage fringe benefits money to pay benefits for all employees, including the owners and executives.