The owner of a Massachusetts construction company has pleaded guilty for his role in a scheme to avoid paying union benefit funds.
In June, federal prosecutors charged Juan J. Alonso and Aguila Construction Co. Inc. of Fitchburg, Mass., with theft or embezzlement from benefit plans, making false statements in documents submitted to benefit plans, and making false statements to the U.S. Department of Transportation.
Alonso pleaded guilty Sept. 4 to multiple fraud charges in U.S. District Court in Boston.
Between 2008 and 2011, federal prosecutors say, Alonso, owner of Aguila Construction, defrauded Local 39 union members of $805,338 by running part of the Aguila Construction payroll through Alonso’s non-union company, Alonso Construction. The payroll underreported hours actually worked by Local 39 Union members, and paid Aguila Construction laborers in cash to avoid hourly pay requirements to union benefit funds.
Called a “double-breasted” arrangement, the U.S. DOT Office of Inspector General said in a news release that similar schemes are commonly used in construction by companies seeking to avoid paying union wages and benefits.
Aguila Construction landed several publicly funded projects between 2008 and 2011, including 12 projects funded by the U.S. DOT through the American Recovery and Reinvestment Act of 2009.
Prosecutors said in a news release that Alonso operated Alonso Construction Inc. and Aguila Construction Co. from the same Fitchburg, Mass., yard and office, even using the same employees, equipment and office staff.
“In connection with this project, Aguila Construction completed and sent to the Massachusetts Department of Transportation certified payroll records falsely stating the identity of employees, the number of hours worked and the wages paid,” a news release from the DOT Office of Inspector General states.
The investigation was conducted jointly between the U.S. DOT Office of Inspector General, the U.S. Department of Labor Office of Inspector General and Office of Labor Racketeering and Fraud Investigations, and the Employee Benefits Security Administration.
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