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United States Attorney Andrew M. Luger announced on March 3 the sentencing of Jeffery John Plzak, 52, to 22 months in federal prison for felony false statements in connection with prevailing wage violations.
Plzak pleaded guilty on July 8, 2014, to one count of False Statements and was sentenced on March 3 before Judge Patrick J. Schiltz in U.S. District Court in Minneapolis.
In addition to the 22-month prison sentence, Plzak was ordered to pay over $240,000 in restitution, pay a fine and was placed on one-year of supervised release to follow the prison term. In sentencing Plzak, Judge Schiltz emphasized the impact of Plzak’s crime on his employees and on Plzak’s competitors and their employees, as well as the need to deter similar offenses by Plzak and others in the future.
Said Mike Wilde of the Fair Contracting Foundation of Minnesota, “Construction workers, business competitors and taxpayers expect all public contractors to obey the law when doing business with public. The U.S. Attorneys Office does a great job in protecting fair competition. So does Minnesota’s Department of Transportation. A federal prison sentence is about the strongest deterrent imaginable for contractors who decide to cheat on public contracts.”
According to the defendant’s guilty plea and documents filed in court, Plzak and his spouse run Honda Electric, Inc., a company based in Loretto, Minnesota. Honda Electric bids on construction projects, including highway and road projects, that are federally and state funded. Many of the projects Plzak bid on required that Honda Electric pay its electricians and other laborers the prevailing wage rate.
On numerous occasions, Plzak won bids based in part on the representation that Honda Electric employees working on each project would receive the prevailing wage. Those projects required periodic submission by Honda Electric of a certified payroll report. In those reports, Plzak knew Honda Electric, at his direction, was representing to the U.S. Department of Transportation – Federal Highway Administration and to the Minnesota Department of Transportation that Honda Electric’s employees were being paid the required prevailing wage.
In fact, as Plzak knew, in many instances employees were being paid less than half of the prevailing wage rate. For example, Plzak admitted that in a certified payroll report dated Sept. 24, 2010, Honda Electric stated it was paying prevailing wage on a federally funded project in Ramsey County, Minnesota, when, in fact, he knew the employees were receiving far less than prevailing wage. In total, Plzak admitted that over a series of projects between 2010 and 2013, Honda Electric underpaid its employees more than $241,000.
This case is the result of an investigation by the Minnesota Department of Transportation’s Labor Compliance Unit and the Federal Bureau of Investigation. Assistant U.S. Attorney David M. Genrich prosecuted the case.