Four principals of San Andreas HVAC, Inc. are accused of taking kickbacks out of their employees' paychecks, and falsely reporting they paid them a prevailing wage for work on public works contracts in Santa Clara County, according to District Attorney's Office spokeswoman Amy Cornell.
San Andreas HVAC CEO Antonio Salas, 44, of Los Banos; foreman Raul Paul Gonzalez, 45, of Hollister; Corporate Secretary Carlos Nunez Ramos, 41, of Hollister; and CFO Ramiro Nunez Ramos, 40, of Hollister have each been charged with seven counts of taking and receiving the wages of a worker.
Carlos Ramos also faces 13 counts of perjury or falsely reporting wages on a public works payroll form, and a violation of workers' compensation insurance premium fraud, Cornell said. And Raul Gonzalez is charges with one violation of making a false or fraudulent statement to discourage a worker from claiming benefits or pursuing a workers' compensation claim.
The four men allegedly ran the "kickback scheme" from August 2004 through January 2007, Cornell said. They ended up scamming about $170,000 from their employees and public agencies from which they won contracts.
San Andreas HVAC, an installer of heating and air-conditioning units, performed a number of jobs for public projects during this time, including South County Housing's Jasmine Square Apartments in Morgan Hill.
In order to qualify for public works contracts in Santa Clara County, the company was required to pay its employees the area's prevailing wage - about $54 per hour.
The managers reported to the contracting party that they paid the prevailing wage. Their employees' paychecks reflected the prevailing wage, but attached to each paycheck was a sticky note instructing the employees to return about 75 percent to the bosses when they cashed their paychecks, Cornell said. The employees ended up being paid only about $13.50 per hour.
Carlos Ramos also allegedly committed workers' compensation fraud by falsely classifying employee wages to their insurance carrier, in order to reduce their premium, Cornell said. Plus, Raul Gonzalez discouraged two employees from reporting their work-related injuries to doctors, prosecutors alleged. The two workers were thus denied medical care and workers' compensation benefits.
Cornell explained that under penalty of perjury, contractors must certify to the body awarding the contract that they are paying the prevailing wage to their employees. The employer is also required to certify that the company has not taken wages from an employee for services rendered on a public project.
Investigators learned about the scheme via an anonymous tip, Cornell said.
Other public projects in which the defendants are accused of applying the kickback scheme include the Santa Clara County Juvenile Hall, and San Antonio Court, a public housing project.
If convicted of all counts, Carlos Ramos faces a maximum of 24 years 8 months in state prison, Gonzalez faces a maximum of 12 years 8 months in state prison, and Salas and Ramiro Ramos both face up to nine years in state prison. Restitution to the employees and insurance carriers would also be ordered. All four defendants are scheduled to be in court March 2 at 9:30 a.m. to set a preliminary hearing date.
Michael Moore Michael Moore covers county and law enforcement issues for the Morgan Hill Times. Reach him at (408) 779-4106, ext. 202, or mmoore@morganhilltimes.com.
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