Gary Bauerly, owner of WATAB, a trucking company located in Rice, Minn., is charged with submitting fraudulent documents to obtain payments as a subcontractor on six highway projects in four counties. He then failed to pay employees the prevailing wage, pocketing some $52,000 owed to approximately 50 workers.
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| Flanked by representatives of the Minneapolis Building & Construction Trades Council and various Building Trades unions, Hennepin County Attorney Mike Freeman announces the charges against an unscrupulous contractor. |
“The defendant engaged in a series of schemes and scams to steal wages from his employees through intimidation and nefarious accounting practices,” explained Freeman. “He defrauded not only his employees, but also the contractors and government agencies he entered into agreements with and the communities in which these projects took place.”
Among the schemes Bauerly allegedly used:
• Certifying payroll reports that overstated wages paid to WATAB employees, then submitting these falsified reports to contractors
• Double check-writing, never disbursing the second check to employees.
• Forcing employees to deposit funds into the defendant’s account under threat of further lost wages, aka kickbacks
• Switching drivers at job sites
• Demanding employees falsify time sheets
• Withholding money from employees to pay for expenses
If convicted, he faces potential jail time of up to 20 years and will be required to pay fines and restitution, Freeman said.
Setting a floor under wages
Minnesota’s prevailing wage law is designed to set a floor under wages for projects built with state money, but it’s often violated, said Dan McConnell, business manager of the Minneapolis Building & Construction Trades Council.
If caught, contractors usually face “a slap on the wrist” and must pay the wages they owe. Bauerly’s case is unusual because, due to the magnitude of the violation, he is being charged with a criminal felony.
“It’s way past time these unscrupulous contractors are held criminally responsible for their acts,” McConnell said. “My hat’s off to the Hennepin County Attorney’s Office.”
A state employee, Clancy Finnegan, brought the case to the attention of the county attorney’s office. Finnegan is in charge of investigating prevailing wage violations for the Minnesota Department of Transportation and is a member of MAPE, the Minnesota Association of Professional Employees.
Staff cuts at the state level have hurt the department’s ability to enforce the law, Finnegan noted. “We were fortunate to be able to work with the Hennepin County Attorney’s Office to pursue criminal charges on this” case.
The violations go back to highway projects done in 2007 on Trunk Highway 35 in Pine County, Highway 1 in Stearns County, Trunk Highwy 97 in Washington County and Shingle Creek, Jefferson Highway and Highway 61 in Hennepin County.
The investigation found that, while employees were required to be paid between $25.13 and $34.80 per hour under the prevailing wage law, they were actually being paid between $11 and $16 per hour. The company also withheld money from paychecks to cover job expenses including gas and repairs for vehicles.
Prevailing wage laws, which date back to the 1930s, were instituted precisely to prevent unscrupulous contractors from winning government contracts, then underpaying employees. Freeman said the Bauerly case should serve as a warning that the law will be enforced.
“Be fair to your workers, be fair to your contractors, be fair to the taxpayer – pay the prevailing wage,” he said. “If you don’t pay it, we’re going to find out. We’re going to find you and we’re going to go after you.”
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Gary Bauerly, owner of WATAB, a trucking company located in Rice, Minn., is charged with submitting fraudulent documents to obtain payments as a subcontractor on six highway projects in four counties. He then failed to pay employees the prevailing wage, pocketing some $52,000 owed to approximately 50 workers.
|
| Flanked by representatives of the Minneapolis Building & Construction Trades Council and various Building Trades unions, Hennepin County Attorney Mike Freeman announces the charges against an unscrupulous contractor. |
“The defendant engaged in a series of schemes and scams to steal wages from his employees through intimidation and nefarious accounting practices,” explained Freeman. “He defrauded not only his employees, but also the contractors and government agencies he entered into agreements with and the communities in which these projects took place.”
Among the schemes Bauerly allegedly used:
• Certifying payroll reports that overstated wages paid to WATAB employees, then submitting these falsified reports to contractors
• Double check-writing, never disbursing the second check to employees.
• Forcing employees to deposit funds into the defendant’s account under threat of further lost wages, aka kickbacks
• Switching drivers at job sites
• Demanding employees falsify time sheets
• Withholding money from employees to pay for expenses
If convicted, he faces potential jail time of up to 20 years and will be required to pay fines and restitution, Freeman said.
Setting a floor under wages
Minnesota’s prevailing wage law is designed to set a floor under wages for projects built with state money, but it’s often violated, said Dan McConnell, business manager of the Minneapolis Building & Construction Trades Council.
If caught, contractors usually face “a slap on the wrist” and must pay the wages they owe. Bauerly’s case is unusual because, due to the magnitude of the violation, he is being charged with a criminal felony.
“It’s way past time these unscrupulous contractors are held criminally responsible for their acts,” McConnell said. “My hat’s off to the Hennepin County Attorney’s Office.”
A state employee, Clancy Finnegan, brought the case to the attention of the county attorney’s office. Finnegan is in charge of investigating prevailing wage violations for the Minnesota Department of Transportation and is a member of MAPE, the Minnesota Association of Professional Employees.
Staff cuts at the state level have hurt the department’s ability to enforce the law, Finnegan noted. “We were fortunate to be able to work with the Hennepin County Attorney’s Office to pursue criminal charges on this” case.
The violations go back to highway projects done in 2007 on Trunk Highway 35 in Pine County, Highway 1 in Stearns County, Trunk Highwy 97 in Washington County and Shingle Creek, Jefferson Highway and Highway 61 in Hennepin County.
The investigation found that, while employees were required to be paid between $25.13 and $34.80 per hour under the prevailing wage law, they were actually being paid between $11 and $16 per hour. The company also withheld money from paychecks to cover job expenses including gas and repairs for vehicles.
Prevailing wage laws, which date back to the 1930s, were instituted precisely to prevent unscrupulous contractors from winning government contracts, then underpaying employees. Freeman said the Bauerly case should serve as a warning that the law will be enforced.
“Be fair to your workers, be fair to your contractors, be fair to the taxpayer – pay the prevailing wage,” he said. “If you don’t pay it, we’re going to find out. We’re going to find you and we’re going to go after you.”