Recently, a construction company in Manhattan was indicted for concealing its actual operating scale by distributing $40 million in cash wages to workers through shell companies and defrauding over $9 million in insurance premiums over a span of 7 years.
Manhattan District Attorney Alvin Bragg announced on June 6th that the construction company based in New Jersey, known as “SCHNELLBACHER-SENDON GROUP, LLC (SSG),” along with its top executives, are facing charges for hiding over $40 million in cash wages through fictitious shell companies and defrauding over $9 million in insurance premiums from the New York State Insurance Fund (NYSIF) between 2017 and 2024.
According to court documents, SSG was engaged in large-scale exterior construction projects in New York City but consistently paid unreported cash wages to workers. They also falsely reported to the insurance fund that they only had 18 administrative staff when in reality, they employed as many as 125 workers across more than 12 sites. In 2020, the company falsely claimed to the state labor department that they were no longer operating in New York.
To conceal their actual operating scale and distribute cash wages to workers, SSG colluded with the New Jersey-based CHECK PROS check cashing company. The owner of CHECK PROS, Joseph Lopresti, and manager Cecilia Ortiz Vargas, used false identities to open accounts and falsely reported cash transactions as belonging to their fabricated subcontractors.
Each week, SSG issued checks ranging from $120,000 to $150,000 to shell subcontractors, which employees would cash at CHECK PROS and then distribute to the actual workers on-site. Additionally, SSG used fake companies to handle workers’ compensation claims for unreported employees to mask their employment relationships.
In June 2024, Manhattan prosecutors, in collaboration with the New Jersey State Attorney’s Office, state police, and local police, executed search warrants on SSG and CHECK PROS. They discovered numerous false identity documents, records of transactions with SSG, and unreported tax forms covering 430 workers.
Upon learning of the search operation, SSG Vice President Jesus Sendon immediately called employees to shut down the work sites in an attempt to destroy evidence, leading to additional charges of obstructing justice against him.
The indictment was filed in the New York State Supreme Court, naming the company owners, managers, and the head of the check cashing company CHECK PROS as defendants. They are facing charges of fourth-degree conspiracy, first-degree money laundering, and some are also accused of first-degree insurance fraud and falsifying business records.