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NY Business Owner Charged with Workers Compensation Fraud

Astoria, Queens NY Workers Compensation Fraud

workers-comp-fraud-The owner and CEO of a New York business has been indicted in New York State Supreme Court in connection with an ongoing investigation. The Manhattan District Attorney’s Office announced the indictment of Michael Cholowsky, chief executive officer of Sky Materials Corporation. The charges come after an investigation initiated last year in the connection a construction site fatality in New York City in April, 2015. According to court documents, Cholowsky was charged with first and second degree fraud, as well as Offering a False Instrument for Filing in the First Degree. Prosecutors say that Cholowsky misrepresented or hid information about his payroll and intentionally understated the number of workers in his employ.

In documents filed by the Manhattan District Attorney’s Office, prosecutors allege that Cholowsky failed to disclose more than $650,000 in payroll between April, 2013 and April, 2014, defrauding workers’ compensation insurance providers of more than $100,000. During the same time frame a year later, Sky Materials understated payroll by more than $3 million, with workers’ compensation insurance premiums savings of more than $1 million. The investigation found that Cholowsky had set up separate accounts to pay employees through the company’s operating account, rather than through payroll. In addition, Cholowsky reported to workers’ compensation insurance carriers on at least two occasions that the company had less than 20 employees, when in fact, that actual number ranged anywhere from 50 to 150 workers at any given time.

The investigation that led to these charges began nearly a year ago, when a 22-year-old employee of Sky was killed in a trench collapse. The preliminary investigation indicated that Sky and its on-site foreman had been criminally negligent in failing to adequately ensure the safety of workers. The foreman and others were charged with manslaughter, as well as criminal negligence.

New York Business Owner Charged with Workers Compensation Fraud

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About The Author

Picture of Michael Serres, ESQ.

Michael Serres, ESQ.

Michael Serres, ESQ. is a reputed Workers’ Compensation Lawyer in Astoria, Queens, NY. He graduated from St. John’s University School of Law in 1989. Mr. Serres was admitted to practice law in New York State in 1990 and is admitted in the Federal District Courts for the Southern and the Eastern Districts of New York. He has served on the Board of Directors of the Workers’ Compensation Bar Association and is currently serving on the Board of Directors of the Queens County Bar Association.