The Real Deal New York

Construction firm working on some of NYC’s biggest projects accused of stealing wages, cheating state out of $8M

Parkside Construction faces fraud charges
By Kathryn Brenzel | May 16, 2018 12:15PM

215 Chrystie Street, 133 Greenwich Street, 111 West 57th Street and Cyrus Vance Jr.

A Queens-based construction company working on 111 West 57th Street allegedly stole $1.7 million in wages from its workers and cheated the state out of $8 million.

Parkside Construction faces fraud, larceny and other charges for allegedly failing to pay at least 520 of its employees for the correct hours of work completed at various job sites in the city, including JDS Development Group and Property Markets Group’s luxury condominium tower, according to a complaint filed on Wednesday in state Supreme Court. If workers complained about being underpaid, they were either told that the paycheck was a mistake or they were instructed to find work elsewhere, Manhattan District Attorney Cyrus Vance Jr. said on Wednesday. He noted that many of these workers were undocumented immigrants, making them particularly vulnerable to the scheme. The concrete company allegedly stole $50,000 from one employee over a three-year span.

Parkside also allegedly fudged timesheets at JDS’ 626 First Avenue, the Lam Group’s 215 Pearl Street, Hidrock Realty’s 133 Greenwich Street, McSam Hotel Group’s 326 West 37th Street and 350 West 40th Street, Ian Schrager’s 215 Chrystie Street and DLJ Real Estate Capital Partners’ 9 Orchard Street. When asked during a press conference if developers of these projects would face any legal repercussions, Vance wouldn’t comment directly.

“We are looking at all players in the business,” he said.

Parkside is also accused of receiving insurance coverage from the New York State Insurance Fund for three companies — Parkside Construction Builders Corp., Parkside Construction Contractors Inc. and GS&F Enterprises LLC — that were merely alter-egos of each other, since they shared the same management, employees and resources. Parkside allegedly under-reported the number of workers on its payroll, resulting in lower workers’ compensation insurance premiums, the Manhattan District Attorney’s Office alleges. Authorities estimate this cheated the state out of at least $7.8 million.

The company’s payroll services provider, Michigan-based Affinity Human Resources, is also charged in the case. Parkside’s owners, Francesco and Salvatore Pugliese, as well as its accountant, general foreman and payroll manager were also named as defendants.

An employee who answered the phone at Parkside’s Flushing office on Wednesday indicated that he wasn’t aware of the complaint. Parkside’s attorney wasn’t immediately available to comment. JDS’ Michael Stern declined to comment.

Wednesday’s criminal complaint follows a 2015 lawsuit that accused the contractor of stealing as much as $8 million from workers at the 57th Street tower and other sites, the New York Daily News reported at the time. Court records indicate that case was closed in 2016 but no documents on the lawsuit are available online.

The state’s investigation into Parkside sprung from a tip from the New York City District Council of Carpenters, officials said on Wednesday. Since launching the Wage Theft Initiative in December, the district attorney’s office and other officials have returned $649,000 in stolen wages.

Several reports in 2015 noted that Parkside was among the nonunion companies hired to work on Stern’s 57th Street supertall — one of the first major projects of its kind in the city to hire nonunion labor. A Commercial Observer story at the time stated that Parkside had a long history of safety issues at its sites — including a death at 326 West 37th Street — and that the company had hired a subcontractor with mafia ties. Stern told the Observer at the time that several unions also had a long history of mob connections.

“If everybody wanted to hire a choir boy to do construction in New York City, there would be no construction in New York City,” he told the Observer.