Roofing Company Pleads Guilty To Felony Charges And Company’s Principal Pleads Guilty To Misdemeanors And Will Pay Restitution
Long Island, NY -- A Suffolk County construction company owner today admitted to cheating insurance companies out of more than a quarter of a million dollars in premiums by misrepresenting the nature of the job responsibilities of insured employees as less high-risk than they were. The guilty plea is the result of work conducted by the offices of New York State Inspector General Lucy Lang and Suffolk County District Attorney Raymond A. Tierney.
"The misclassification of employees creates an unfair playing field, puts all workers at risk and drives up the cost of coverage for everyone,” said Workers' Compensation Fraud Inspector General Lucy Lang. “My office is steadfastly committed to protecting New York’s workers, our economy, and the integrity of the insurance system. I thank District Attorney Raymond Tierney and his team for their partnership in these efforts."
“Worker’s compensation insurance is designed to protect the health of our workers within a framework that will not bankrupt the New York State Insurance Fund,” said Tierney. “By deliberately lying to save themselves money, these defendants endangered workers and increased construction costs for those who play by the rules by refusing to pay their fair share to keep workers safe. I thank Inspector General Lucy Lang for her partnership in bringing this to our attention.”
The NYS Worker’s Compensation Fraud Inspector General, part of the Offices of the Inspector General, found that DME Construction Associates, Inc. (“DME”) and its owner, Peter Chardon, of Setauket, NY, had classified its roofing workers as doing “painting and decorating,” a less risky classification and therefore less expensive for workers’ compensation insurance. DME knowingly underreported their payroll to the New York State Insurance Fund (NYSIF) resulting in an underpayment of premiums in the amount of $65,875.13. Between February 20, 2017 and May 27, 2021, DME knowingly underreported its payroll to State Farm Fire and Casualty Company resulting in an underpayment of premiums in the amount of $231,576.00.
During its investigation, the Inspector General found that DME’s contracts for Long Island shopping mall buildings and a new cancer center building for Southampton Hospital were for roofing, and not for “painting and decorating,” as the company represented to insurance companies. During the period between 2015 and 2019, DME was insured by NYSIF and then State Farm. The Inspector General referred the matter to the Suffolk District Attorney, which served additional subpoenas on other DME clients.
Chardon entered a guilty plea today at Suffolk County Supreme Court to the charges of a violation of Penal Law § 155.25, Petit Larceny, a Class “A” Misdemeanor, and Penal Law § 176.10, Insurance Fraud in the Fifth Degree, a Class “A” Misdemeanor. His company, DME, pled guilty to Penal Law § 155.40(1), Grand Larceny in the Second Degree, a Class “C” Felony and a violation of Penal Law § 176.25, Insurance Fraud in the Second Degree, a Class “C” Felony.
As part of the plea agreement, Chardon and DME have agreed to pay $65,875.13 representing the amount of funds stolen from NYSIF, and a payment of $231,576.00 representing the amount of funds stolen from the State Farm Fire and Casualty Company.
The investigation was conducted by Senior Investigator David Regazzi and Senior Investigative Counsel Ken Michaels. Deputy Inspector General Jean Carsey leads the Offices of the Inspector General Long Island Regional Office. Suffolk County Detective Investigator John Fitzgerald conducted the investigation on behalf of the Suffolk County District Attorney’s office and Assistant District Attorney Carey Ng prosecuted the case.