public housing

Contractor Guilty of Wage Theft Was Also NYCHA No-Bid King

The contracting firm is accused of cheating its own workers and NYCHA.
The contracting firm is accused of cheating its own workers and NYCHA. Photo: Ben Fractenberg/THE CITY

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A Brooklyn contracting firm that’s pleaded guilty to wage-cheating workers on NYCHA jobs has received more than $140,000 in no-bid contracts from the Housing Authority, records show.

SAC Restoration and its husband-and-wife owners entered guilty pleas Dec. 31 in Manhattan Supreme Court, admitting that for years they’d falsely certified they were paying employees the required “prevailing wages” on multiple NYCHA jobs.

A review of public housing contract data by THE CITY reveals that in 2018 alone, SAC received 29 separate no-bid contracts totaling more than $141,000. Each contract was just below $5,000, the figure that would require NYCHA to put the job out for competitive bids.

At the Patterson Houses in the Bronx, for example, SAC got 13 separate contracts for work between March 30 and June 26, 2018, each for just under $5,000, records show. The total came to more than $63,000, an amount that would normally require competitive bidding.

Warned About No-Bid Abuse

As THE CITY revealed in October, the city Department of Investigation has warned NYCHA three times in the last three years about allowing mid-level bureaucrats to pick a select group of contractors for repair jobs without bidding the work out.

In a 2016 memo, DOI found that one-third of the no-bid contracts had been handed to an elite group of just 17 vendors. DOI stated that the overuse of no-bid contracts left NYCHA vulnerable to the potential for corruption, with the possibility that NYCHA staffers were taking bribes to steer contracts to favored firms.

A 2017 DOI probe found evidence that one Queens-based contractor, Matrixx Construction, had billed the Housing Authority for work actually performed by NYCHA staff.

Facing pressure to whittle down a persistent backlog of repair requests, NYCHA has increasingly relied on no-bid work. Spending on those contracts rose from $38.8 million in 2017 to $61.1 million in 2018, according to records obtained by THE CITY. With $41.6 million spent on no-bid jobs through August, NYCHA was on pace to go even higher in 2019.

Overcharging Taxpayers While on Vacation

SAC’s transactions with NYCHA appear to date back to 2013, when the company was accused in federal court of labor violations for allegedly failing to pay overtime to workers on several painting jobs. The jobs referenced in the lawsuit included work on a NYCHA development, Harrison Avenue Rehab, in The Bronx.

Responding to the suit, SAC claimed that the plaintiff did not work for them but for a subcontractor. The suit was later dropped after that person disappeared, court records show.

During their plea on New Year’s Eve, SAC’s owners, Avtar and Sima Chand, admitted that the wage cheating on NYCHA jobs dated to 2014.

The company and the Chands, both 32, pleaded guilty to misdemeanor charges related to filing false documents, admitting they’d billed NYCHA for work at the prevailing rate of $41.75 per hour yet hired laborers at a much lower wage.

In some cases, the Chands certified they were doing this work personally while they were on vacation in the Bahamas and India. The plea was first reported by the Daily News.

Under the plea — which followed a probe by the city Department of Investigation and was prosecuted by Manhattan District Attorney Cyrus Vance Jr. — the firm and owners agreed to pay $154,000 in back wages. If the company meets all requirements under the agreement, the charges will be dismissed.

Mitchell Barnett, an attorney for SAC and the Chands, did not return calls seeking comment.

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