Mass. A.G. Obtains Indictments Against Contractor

August 24, 2004

A Maynard, Massachusetts contractor was indicted on charges that he defrauded seven cities and towns by claiming that he paid minimum prevailing wages on public projects while failing to pay those full wages to workers, Attorney General Tom Reilly announced.

Milton Marder, 51, was indicted by an Essex County grand jury on 12 counts of larceny, conspiracy and prevailing wage violations, including: two counts of larceny, five counts of conspiracy, two counts of intentional non-payment of prevailing wages, two counts of failing to submit true and accurate payroll records, and one count of failing to register and pay unemployment insurance.

Marder obtained sub-contracts on several taxpayer-funded projects throughout Massachusetts beginning in 1997. The alleged violations occurred on seven public construction projects between 2000-2002:

Holliston High School
Brockton Housing Authority Roosevelt Heights
Modernization Project
Brookline Public Library Renovations
Bridgewater State College Harrington Hall Renovations
Hull Memorial Memorial Middle School
Erving Elementary School Project
The Norwell Cole Elementary School Project

The indictments allege that Marder’s companies misrepresented to each city and town that they were paying employees the minimum hourly prevailing wage of approximately $26 per hour, while actually paying them only about $10-$12 per hour, far below the minimum prevailing wage. Many of the workers were recent Brazilian immigrants.

Marder’s former employees filed complaints with the Brazilian Immigrant Center in Brighton, which then referred the complaints to AG Reilly’s Fair Labor and Business Practices Division.

The Attorney General’s investigators were able to identify more than 150 employees who were repeatedly underpaid for their work on the seven public projects. Investigators reviewed and analyzed thousands of pages of financial records and payroll information. Many of the employees were unskilled laborers with limited English language skills. Several were unaware of their right to be paid the minimum prevailing wage.

The indictments allege that Marder concealed his crimes by designating his employees as corporate officers and by submitting fraudulent payroll records to the communities in which he worked. Relying on Marder’s companies’ certifications, the cities and towns paid them more than $1.1 million. Employees were allegedly underpaid more than $800,000. Marder allegedly knowingly failed to report and register employees with the Massachusetts Division of Employment and Training, thereby avoiding paying proper unemployment insurance.

The companies through which Marder worked on the public projects were: Detail Services Corporation of Las Vegas, and Andover, Mass; New England Building Services Corporation of Las Vegas and Methuen, Mass; and National Building Services Corporation of Las Vegas and Quincy, Mass.

Massachusetts Prevailing Wage law requires contractors on public construction projects to pay workers a special minimum prevailing wage rate set by the Commonwealth of Massachusetts. Contractors who accept tax payer funds on these projects must promise to pay their workers at least the minimum prevailing wage rate. Each week, the contractors must certify that they are complying with the law.

Last year AG Reilly’s Fair Labor Business Practices Division recovered more than $2.7 million in back wages and fines on behalf of Massachusetts workers.

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