MINNEAPOLIS - A trucking company owner faces felony "theft by swindle" charges for stealing thousands of dollars in wages from employees, the Hennepin County Attorney announced on Mar. 29.
County Attorney Mike Freeman said the groundbreaking case should be a signal to all contractors to obey the law and pay their employees fairly.
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 Minnesota 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 and Construction Trades Council and various building trades unions, Freeman said the unscrupulous contractor "engaged in a series of schemes and scams to steal wages from his employees through intimidation and nefarious accounting practices.
"He defrauded not only his employees, but also contractors and government agencies he entered into agreements with and the communities in which these projects took place," Freeman said.
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, Bauerly faces potential jail time of up to 20 years in prison and will be required to pay fines and restitution, Freeman said.
Like federal wage law, 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 and 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 Minnesota 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 the Minnesota Association of Professional Employees, a large public workers union.
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, he added.
The trucking firm's violations go back to highway projects done in 2007 on Trunk Highway 35 in Pine County, Highway 1 in Stearns County, Trunk Highway 97 in Washington County and Shingle Creek, and 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."