DA: Bethlehem Contractor Fraudulently Lists Employees as Subcontractors

Kevin Lott, Carpenters Union

In what he believes to be the first ever criminal prosecution on a county level, District Attorney John Morganelli announced on Monday that he intends to charge Bethlehem construction firm Salukas and White with a scheme to defraud workers of decent wages and the government of taxes by deliberately misclassifying employees as subcontractors. He also plans to charge Mark White, a principal in that firm, with perjury and false swearing before a Northampton County Investigating Grand Jury.

Marganelli is acting on a recommendation of that Grand Jury, which heard testimony from employees and subcontractors who say that the firm paid close to a million dollars to two middlemen who would recruit day laborers and pay them in cash. Between 2001 and 2013, Salukas and White paid Tony's Drywall and Leauber Drywall  $884,254 to recruit and pay workers, in cash, far below the minimum wage standard in the construction industry. The middlemen took a ten per cent cut. According to Morganelli, this practice allows companies like Salukas and White "to compete unfairly against firms who play by the rules." It deprives the government of tax revenue. Even worse, it harms workers.

"This practice is going on right now with the same company,"  said Kevin Lott, business agent for LV Carpenters Union Local 600. "It's so refreshing to see somebody do something about it." Lott accused Salukas of "exploiting people" who will end up on welfare when they turn 65 because they will be unable to collect social security. "It's a shame on every level."

Morganelli also plans to make the Grand Jury's findings known to the IRS, Northampton County members of the state legislature, Governor Tom Wolf and Pa. Executive Deputy Secretary of Labor Robert V. O'Brien. .