Contracting Firm Charged With 'Defrauding' Workers On Project: DA

EAST HAMPTON, NY — A Long Island contracting company has pleaded guilty to underpaying workers and submitting false payrolls to East Hampton Town in connection with a public works project, Suffolk County District Attorney Tim Sini said.

William G. Prophy, LLC, doing business as WGP Contracting, Inc., pleaded guilty Thursday to first degree offering a false instrument for filing, a felony, Sini said.

On Nov. 16, 2017, WGP Contracting, Inc., was awarded the bid for the East Hampton Town Hall cedar shake shingle roof replacement project, Sini said. During the course of the project, the company paid several employees as laborers instead of roofers; laborers must be paid at a higher rate, in accordance with New York State’s prevailing wage schedule, Sini said. The company submitted certified payrolls to East Hampton officials that contained the misclassifications and falsely asserted that the workers had been paid properly, Sini said.

An investigation also revealed evidence that the company had similarly misclassified several workers, some of whom were assigned to the East Hampton project as well, as lower wage rate laborers in connection with a public works project to renovate toll booths at Jones Beach State Park, Sini said.

According to the plea agreement, reached in conjunction with the New York State Department of Labor in regard to underpayments on both projects, the company has forfeited $32,553.81 to the DA's office, to be distributed to the defrauded workers — and was required to pay a fine of $2,500, Sini said.

The company will also be required to remit an additional $10,110.82 in restitution to the New York State Department of Labor for further disbursement to the workers, Sini said. The company’s owner, William G. Proefriedt, also signed a stipulation of wrongdoing with the New York State Department of Labor admitting to willfully failing to pay the prevailing wage and barring Proefriedt and the company from bidding on public works projects for five years, Sini said.

Proefriedt, 58, of Bay Shore, was also arrested in 2018 and charged with first-degree offering a false instrument for filing in connection with his bid on the 2018 Pyrrhus Concer House restoration public works project in Southampton Village, Sini said.

Proefriedt submitted a signed letter to the Southampton Village attorney stating that employees of his company, William G. Prophy, LLC, would perform all plumbing, electrical, and HVAC work on the project and that they were licensed to do so, when in fact they were not, Sini said. That matter has been dismissed in satisfaction of this week's plea and the stipulation of wrongdoing with the Department of Labor, Sini said.

William G. Prophy, LLC, was represented by Raymond Perini. Perini responded in a statement to Patch: "William G. Prophy, LLC entered a plea of guilty to a technical charge of failing to conform to certain wage schedules This is corporate plea, no individuals have pled guilty and all pending matters have been dismissed," he said. "This case Illustrates the problem that small family businesses such as Prophy, LLC — with half a dozen employees, mostly family members— have in dealing with public works projects. Small companies, such as this, often have laborers performing a number of tasks during the day, and each one may be covered by a different standard during a different time of the day."

He added: "It is fertile ground for their competitors to make complaints about them, to harm them, and clear the field for their own bids.All of the workers in this case were paid according to prevailing wage schedules, but in some cases the Labor Department contended that some of their work should have been paid on different schedules. Businesses as small as Prophy do not have a full staff of labor attorneys to guide their payroll decisions."

The case, Perini said, is a "technical violation of an arcane statute, and a frequent source of financial ruin to small family businesses."

Such cases should be handled civilly and do not need to be part of the criminal justice system, Perini believes . "The prevailing wage schedules should be simplified to make them easily understandable by laypeople. In addition, as to the dismissed charge, the government failed to properly investigate it before acting on the complaint of Mr. Profiedt’s competitor. In fact, Mr. Profiedt was working with the village attorney and architect to resolve contract issues which were caused by the village’s failure to provide certain services they were obligated to provide. The village was unaware the charge was being filed. This matter will be litigated as it is a civil matter. "

All of Profiedt’s employees were hired for the job with the correct licenses and were prepared to perform their work, subject to inspection and certification by the village, Perini said. "This was merely a ploy by an unhappy bidder to bump Prophy, LLC off the job," he maintained.

Sini also spoke out: “The consequences of these unscrupulous business practices are two-fold: on the one hand, you have employees not being paid their fair share for the work they are doing, which is not only illegal but immoral,” Sini said. “On the other hand, you have bad actors winning contracts over upstanding companies by cutting corners at the expense of their workers and under-bidding the competition."

The case is being prosecuted by Assistant District Attorney Shaun McCready of the financial investigations & money laundering bureau’s labor crime unit.

“Protecting the hardworking men and women of New York is a priority of the Department of Labor and by cracking down on those who steal from these hardworking New Yorkers we send a clear message that wage theft will not be tolerated in this state,” said New York State Department of Labor Commissioner Roberta Reardon.

Sini urged anyone who believes they are victims of wage theft or any other labor-related crime to contact the Suffolk County District Attorney’s Office’s Financial Investigations & Money Laundering Bureau by calling 631-853-4232 or by emailing InfoDA@suffolkcounty.gov.