Massachusetts Painting Company And Its President Plead Guilty To Failing To Pay Proper Wages And Workers’ Compensation Fraud

October 02, 2007 -- DEDHAM – Today, a Norwood man and his company pled guilty to charges that they failed to pay proper wages. Arthur Tenaglia, 51, and his business, the Allstate Company, Inc., each pled guilty today in Dedham District Court to charges of failure to pay the proper prevailing wages (1 count) and workers’ compensation fraud (1 count). In addition, Tenaglia and Allstate agreed to accept a citation for misclassification of workers.

“We intend to enforce workers’ rights including ensuring they are paid properly and receive appropriate protections,” Attorney General Martha Coakley said. “The practice of misclassification deprives employees of their needed benefits and protections, and leads to lost revenues for the Commonwealth. Workers are strongly urged to contact our Office if they feel that their rights have been violated.”

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After a three-year investigation, the Attorney General’s Office found that from 2001 to 2005, Tenaglia and his company unlawfully classified employees as independent contractors. Misclassification not only denies employees social security and workers’ compensation benefits, but it also prevents employment taxes from being paid to the Commonwealth. In addition, Tenaglia and his company willfully failed to pay the proper wages to their employees on a public construction project for the Plymouth County Sheriff’s Department. On this project, the company’s payroll amount was fraudulently understated, resulting in the payment of lower workers’ comp premiums.

Tenaglia was sentenced to three years of probation. He and his company must pay a $10,000 fine, and were ordered to make full restitution in the amount of $15,000 in wages to three of their employees. Restitution in the amount of $100,000 must also be paid to Travelers Insurance, which was Allstate’s insurance company. Tenaglia and the Allstate Company are barred from public works projects for the next five years.

Attorney General Coakley’s Office is committed to protecting the rights of employees to fair wages. Employees who believe that their rights have been violated are encouraged to call the Attorney General’s Fair Labor Hotline at (617) 727-3465.

The case was prosecuted by Assistant Attorneys General Bruce Trager and Chris Buscaglia of Attorney General Martha Coakley’s Fair Labor Division, with assistance from the Massachusetts Insurance Fraud Bureau and the Massachusetts State Police.

Source: Massachusetts Attorney General