A press release from the U.S. Attorney’s Office:
Former President of Chicago Construction Company Indicted in $1.9 Million Union Fraud Scheme
CHICAGO — The former president of a Southwest Side construction company paid off-the-books cash wages to workers and under-reported their hours as part of a scheme to defraud the benefit funds of the employees’ labor union, according to a federal indictment unsealed Friday.
While serving as president of My Baps Construction Corp., YASHVANT C. PATEL paid less-than-union-scale wages to dozens of employees, including illegal aliens, in order to reduce the employer contributions to the benefit funds of the Construction and General Laborers’ District Council of Chicago and Vicinity, according to the indictment.
Patel falsely reported that My Baps and a sister company, Vijay Construction Corp., owed approximately $600,000 less to the benefit funds and approximately $1.3 million less to the companies’ employees than what was required by collective-bargaining agreements with the union, the indictment states.
Patel, 59, of St. Charles, was arrested Friday morning. He is scheduled to make an initial court appearance at 11:30 a.m. today before U.S. Magistrate Judge Daniel G. Martin in Chicago.
The indictment charges Patel with four counts of mail fraud and four counts of making false statements in documents required to be kept pursuant to the Employee Retirement Income Security Act (ERISA). The indictment seeks forfeiture from Patel of $1.9 million.
From January 2009 through October 2010, Patel controlled the daily operations and finances of My Baps and Vijay, both of which operated as concrete and asphalt contractors while sharing a principal place of business at 7601 S. Kedzie Ave. in Chicago, the indictment states. Patel had authority over the bank accounts of both companies, and he approved expenditures to outside entities, including monthly payments to the benefit funds, according to the indictment.
The benefit funds, in turn, provided union members with pension, health and training benefits. Pursuant to collective-bargaining agreements, My Baps and Vijay were required to pay their employees certain wages, and to provide the benefit funds with monthly remittance reports identifying the hours worked and the total contribution due for each covered employee, according to the indictment.
The indictment charges that Patel under-reported approximately 33,000 hours of work performed by his employees, some of whom were not lawfully entitled to work in the United States, resulting in purportedly lower employer contributions into the union’s benefit funds.
Patel paid many of these workers in under-the-table cash payments, at wages that were less than what was required by the collective-bargaining agreements, the indictment states.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago, Section of Labor Racketeering & Fraud Investigations; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Each count of mail fraud carries a maximum sentence of 20 years in prison, a $250,000.00 fine and mandatory restitution. Each count of making false statements in ERISA documents carries a maximum sentence of five years in prison, a $250,000 fine, and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant United States Attorney Christopher McFadden.