Attorney General Maura Healey.
Owners of a now-defunct commercial plumbing business in Georgetown were indicted on a total of 29 counts of embezzlement and prevailing wage law violations, after taking more than $100,000 in deductions from their workers and never investing it in a retirement fund, Attorney General Maura Healey announced Wednesday.
Roy Cheever, 67, of Topsfield, and Keith Rhodes, 54, of Swampscott were both indicted Monday by an Essex County Grand Jury on charges of larceny by embezzlement over $250 (seven counts each) and failure to pay prevailing wages (seven counts each). Cheever was also charged with one count of failure to submit true and accurate certified payroll records. The plumbing business, Cheever & Rhodes Mechanical LLC, was shut down during December, 2013.
“Businesses that violate prevailing wage laws take advantage of their employees and misuse taxpayer dollars,” Healey said. “We need to protect the rights and hard-earned compensation of workers throughout Massachusetts.”
The investigation, following a referral by the Plumbers & Gasfitters Union Local 12, alleges that from November, 2010, through October, 2011, Cheever and Rhodes underpaid seven of their employees who worked on the Union Crossing project, a public construction project in the Lawrence, involving the redevelopment of a mill building. The defendants employed workers as plumbers and laborers to perform the plumbing subcontractor services.
Cheever and Rhodes falsely took credit for more than $100,000 in wage deductions purportedly to fund employees’ individual 401(k) pension accounts, when no such accounts existed, Healey’s office said.
The amounts withheld ranged between $2,000 to as much as $30,000 per employee, depending on the number of total hours they worked on the project. The indictments also allege that Cheever failed to submit accurate payroll records by falsely reporting the pension deductions.
Under the Massachusetts Prevailing Wage Law, contractors and subcontracts engaged in public construction projects must pay their employees a special minimum wage. The required wage rate is based on the occupational classification for the type of work they perform. The law also requires that contractors and subcontractors working on public construction projects to submit true and accurate certified payroll records to the awarding authority on a weekly basis. These records must contain the employees’ identities, their hourly rates of pay, the job classifications of the work performed, and information about deductions taken from their pay.
Employers may take deductions from employees’ prevailing wages to pay for contributions to certain bona fide benefit plans, including retirement plans such as 401(k) plans.
Cheever and Rhodes are scheduled to be arraigned on Oct. 16, 2015.