Equipment Type

NYC Contractor Indicted for Falsifying Worker Comp Info

Young worker's death leads owners to scheme to avoid $3 million in insurance premiums

March 02, 2016

Manhattan District Attorney Cyrus R. Vance, Jr., announced the indictment of Michael Cholowsky, owner of Sky Materials Corporation, an excavating subcontractor, for concealing information about payroll and submitting false information about the number of workers employed by his company. Cholowsky is charged with first degree workers comp insurance fraud and filing false statements.

According to documents filed in court, in 2015 Cholowsky received premium reductions by underreporting payroll to the New York State Insurance Fund, a workers’ compensation carrier, in two separate filings pertaining to two distinct policy periods.

Between April 2013 and April 2014, Cholowsky concealed more than $650,000 in payroll, resulting in a premium reduction of more than $100,000. For the period between April 2014 and April 2015, Cholowsky hid more than $3 million in payroll, resulting in a premium reduction of well over $1 million. Cholowsky concealed the funds by processing payroll through a check casher and paying employees through the company’s operating bank account.

Cholowsky is charged with submitting false documents regarding the company’s registration and employees to the New York Business Integrity Commission (BIC) claiming his company employed fewer than 20 workers, when in fact, he employed at least 50 people between 2012 and 2014, and had more than 150 workers between 2014 and 2015.

The indictment stems from an investigation into a construction site fatality that occurred April 6, 2015 where  22-year-old Carlos Moncayo was killed when an improperly secured trench collapsed and crushed him. At that time, OSHA fined the company $140,000. In a separate filing, Cholowsky and his supervisors have been charged with criminally negligent homicide and reckless endangerment because they did not warn Moncayo to get out of the pit in the language he understood.

 “In the construction industry, a lax approach to following proper procedures may be characteristic of a much more dangerous disregard for workers’ safety,” said District Attorney Vance. “Dishonest business practices hinder oversight and create potentially life-threatening hazards for workers and residents."

This is not the first time Cholowsky has faced criminal charges. He was involved in a 1997 bribery scheme involving stolen trucks at the Brookhaven NY, landfill.

More like this

Comments on: "NYC Contractor Indicted for Falsifying Worker Comp Info"

Overlay Init