He charged that labor tax fraud and wage theft cheats tens of thousands of construction workers and costs New York State taxpayers approximately $1 billion each year.

Mr. Ross said that wage theft has “escalated into a significant crisis with corrupt contractors exploiting legal loopholes to evade consequences for their actions.”

District Attorney Hoovler explained that each year tax fraud in the construction industry costs Americans untold billions of dollars. Much of the fraud occurs through paying employees “off-the-books,” misclassification of workers, and improperly treating employees as independent contractors when they are in fact employees who are entitled to all the benefits and protections that New York State law affords.

“I have long prioritized supporting Orange County’s workers,” said District Attorney Hoovler. “This event not only recognizes the important issues facing the construction industry, it serves to raise awareness of matters that both directly and indirectly impact members of our community.  I am pleased to be working with organized labor in Orange County to ensure that contractors who cheat on taxes or illegally pay improper wages cannot enjoy an advantage over contractors who follow the law.”

Additionally, unscrupulous contractors who cheat have a competitive benefit over honest contractors who play by the rules, he said. Employees who are paid off the books suffer from not being able to obtain overtime and other benefits and must often pay additional taxes which should be borne by the employers.

“Tax fraud, construction fraud is pervasive across New York and across the Northeast and its costs us a ton of money,” District Attorney Hoovler said.

Since March 2015, the Orange County District Attorney’s Office has operated a Labor Crime Tip Line dedicated to receiving reports of crimes involving the workplace, particularly crimes involving failure to pay proper wages, unsafe working conditions, prevailing wage violations, workers compensation fraud, and other crimes where either employees or the government have been victimized.

District Attorney Hoovler stated that thus far the county has recovered approximately $7 million from contractors who engaged in labor fraud practices. He noted that his office would rather recover the funds than prosecute, but noted that over the years a number of contractors have been prosecuted and faced either misdemeanor or felony grand larceny charges.

He said the aim is to simply “level the playing field” for local union contractors who pay proper prevailing wages and benefits to their workers and that his office will continue to work with local organized labor to root out instances of tax and wage fraud.

Union officials praised the Orange County Industrial Development Agency for properly monitoring projects to ensure that they adhere to workforce and prevailing wage rules. However, they noted that the New York State Department of Labor, charged with enforcement of state wage laws, are severely understaffed and therefore it is left up to labor unions and the public to notify authorities of instances of labor fraud.

District Attorney Hoovler noted callers to the county’s Tip Line may leave information anonymously, or if they wish to be contacted by a District Attorney Office criminal investigator, they may leave their contact information. The telephone number for the Labor Crimes Tip Line is (845) 291-2107.

Union officials stated that the next local “Tax Fraud Day of Action” will be held on April 15 at the Westchester County Office Building in White Plains where members of the building trades and government officials are expected to be on hand.

Published: April 17, 2025.