A San Mateo County woman has been charged with 57 felony counts of cheating her employees of more than $600,000 in wages while working on projects for both the city and school district in San Francisco.
According to District Attorney George Gascón, 51-year-old Frances Ann Doherty is the owner of Doherty Painting & Construction, a painting contracting company that was awarded numerous public contracts with the city of San Francisco, San Francisco Unified School District, and other public agencies. Contractors on public work projects are required to pay their workers the prevailing wage and verify to the public agency -- on a weekly basis -- that the correct wages were paid out.
However, court documents indicate that Doherty reported 23 different public projects, and said her employees had been paid the prevailing wage on each and every project, with some projects lasting several months. But evidence in a criminal investigation revealed otherwise, according to the DA.
In fact, Doherty Painting's employees were only paid a fraction of the wages to which they were entitled.
Prosecutors say that Doherty concealed the prevailing wages violations with fraudulent information she handed over to auditing agencies.
Doherty also allegedly provided fraudulent employee payroll information to Redwood Fire Casualty Insurance Company and to Zurich Insurance from September 2006 through June 2009, which enabled her to pay lower workers' compensation insurance premiums to these carriers. The total loss to the insurance carriers as a result of the premium fraud is $108,000.
"We intend to prove that over the course of three years the defendant underpaid her employees and pocketed over $600,000 that the City thought it was paying for those wages, and defrauded her workers' compensation insurance carriers out of over $100,000 in insurance premiums," Gascón said.
"This conduct not only victimizes workers who are desperately trying to make a living in a very tough economy, it also hurts the honest businesses that were unable to underbid and win as a result of this scheme," he added.
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