Construction Fraud's Deadly Cost
Construction fraud is real, its effects are far-reaching and often deadly.
Carlos Moncayo, 22, was killed when an unrestrained dirt wall weighing thousands of pounds collapsed on him at a Ninth Avenue construction site. Harco Construction had been cited for safety violations, but the mandated wall retainers were not used. – Crains New York Business and Newsday
What is construction fraud and why should you care about it?
It’s a dangerous domino effect that can start with a developer looking to save money on crew costs, which can lead to cutting corners on safety regulations. From there it can proceed to misreporting worker pay rates and hours, and eventually become a tax evasion scheme for wages unpaid. Aside from trying to save money, the rest of this behavior is criminal. And the results of it are poorer quality work, an abused workforce, and many unnecessary fatalities.
The connection between contractors cutting corners and people dying could not be clearer.
“People who cheat in one area cheat in all areas,” said James Rogers, deputy commissioner for worker protection with New York’s Department of Labor. In April a worker was killed in a crane collapse at the 570 Broome Street work site, and Rogers made his point. “It was a nonunion job and that goes without saying,” he said. “If you don’t think fraud is a matter of life and death, think again.”
Now consider the fact that the overwhelming majority of fraud cases are perpetrated by non-union contractors (see table below). And the number of non-union shops in New York is on the rise. Do the math. This not good news for New York City construction workers.
Time and again, we’ve seen how wage theft is symptomatic of an overall disregard for workers’ wellbeing."
Manhattan District Attorney
Construction Fraud in 2016 and Death in 2017
Sources: "The Substantial Fiscal Costs of Employer Fraud in the New York City Construction Industry" prepared by James A. Parrott, Ph.D., May 2017 and "Deadly Skyline: An Annual Report on Construction Fatalities in New York State" by Charlene Obernauer, Executive Director, NYCOSH, January 2018.
Managers for Harco Construction, which supervised the Ninth Avenue construction site where Mr. Moncayo was killed, and were said to have ignored months of repeated inspector warnings about hazardous work conditions, here being led into court. – New York Daily News
Manhattan City District Attorney Cyrus Vance, Jr. made the connection between fraud and fatalities undebatable. “Time and again, we’ve seen how wage theft is symptomatic of an overall disregard for workers’ wellbeing: On worksites where companies regularly defraud their employees, we have also seen them playing fast and loose with their workers’ lives and safety,”
He continued, offenders “devalue their workers’ livelihoods, underpay them and insure them for lower-risk work while they simultaneously send them to carry out complicated construction projects.”
Fraud is getting workers killed.