NEW YORK (1010 WINS) — A pair of longtime New York City contractors, who are brothers, pleaded guilty Friday to evading more than $1 million in insurance premiums by misclassifying workers for financial gain, the Manhattan DA's office announced.
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Nicholas Dragonetti, 49, and Vito Dragonetti, 53, each pleaded guilty to offering a false instrument for filing, and their companies, Dragonetti Brothers Landscaping and D.B. Demolition, pleaded guilty to insurance fraud between 2017 and 2019.
Since 1998, the Long Island brothers have secured more than 100 city contracts for park landscaping and maintenance, as well as for sidewalk reconstruction and pedestrian crosswalk ramp construction, according to the DA's office.
These "higher-risk" jobs typically require workers to use heavy machinery to demolish and replace pavement and ramps, and accordingly, a higher workers' compensation insurance classification.
The duo bid on and won contracts for excavation, sidewalk reconstruction and pedestrian ramp replacement for residential blocks throughout the city, totaling millions of dollars, while falsely classifying 217 laborers, foremen and heavy-equipment operators as florists, office workers or sales representatives.
"Workers doing dangerous work should be afforded every protection possible, yet these city contractors misclassified their employees for financial gain," said Manhattan District Attorney Alvin Bragg. "As a result, they put their workers at risk, while also undermining the integrity of the public bidding process."
The district attorney's office said that through this scheme, the two avoided paying more than $1.1 million in insurance premiums between 2017 and 2019 by intentionally misclassifying numerous employees on their applications to the New York State Insurance Fund for workers' compensation insurance in order to avoid paying required premiums.
In the same period, D.B. Demolition evaded more than $81,000 in insurance premiums by misclassifying a number of employees in NYSIF paperwork by claiming the individuals were office workers.
Prosecutors said that simultaneously, the employees were listed as commercial drivers in paperwork filed with the New York City Business Integrity Commission, the organization in charge of regulating the city's private carting industry.
Both agreed to pay $1.2 million in restitution to the New York State Insurance Fund as part of their plea agreement, and they were barred from bidding on any future contracts with the New York City Department of Design and Construction and BIC for the next three years.
The ban also includes any other companies where the brothers hold more than 10% ownership.
Their plea agreement also stipulates further actions, such as the appointment of a managing director for the landscaping company and the placement of independent monitors in their companies for a three-year period.
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