Construction owners charged with extorting employees

Posted: March 21, 2013

Two construction executives conspired to force their employees to pay kickbacks to keep their jobs at a Fort Dix reconstruction project and then also conspired to falsify wage records, according to an indictment unsealed in federal court in Camden on Tuesday.

Leonard Santos, 66, of Yardley, owner of Sands Mechanical Inc. in Bristol, and Alex Rabinovich, 57, of Richboro, the company's general manager, pleaded not guilty before U.S. Magistrate Judge Ann Marie Donio.

Meanwhile, federal investigators combed through Sands' offices, according to Santos' attorney, Joel D. Rosen of West Windsor, N.J.

"No [kickback] money came to him," Rosen said.

He said other Sands employees may have "tried to put the squeeze on their fellow employees" without Santos' knowledge.

From November 2009 to September 2010, Sands was a subcontractor responsible for sheet metal, electrical, and plumbing work needed to restore the Marine Corps Training Center at Joint Base McGuire-Dix-Lakehurst.

In court Tuesday, Santos also was charged with orchestrating a campaign to intimidate and injure the site manager for the general contractor at the Dix project because the manager challenged the quality of Sands' work.

The manager had also threatened to stop payments until Sands paid its employees money he said they were due, according to the indictment.

On May, 17, 2010, the manager's Ford Ranger pickup was torched. Three weeks later, on June 10, the manager was struck by a vehicle as he approached his Burlington County home on a bicycle, according to federal documents.

The investigation has led to the arrest and conviction of seven coconspirators, including Santos' son-in-law. Charges include arson, aggravated assault, and collecting kickbacks.

The 21-page indictment unsealed Tuesday describes a workplace full of corruption.

"As a practice, employees were told they had to kick back $10 an hour," Assistant U.S. Attorney V. Grady O'Malley said. "That's the way business was done."

The job site came under scrutiny when Local 27 of the Sheet Metal Workers International Association learned that workers were not being paid the industry standard wage, as required by law for federal construction projects.

The U.S. Department of Labor investigated and ordered that the workers receive back pay. Eventually, they were paid settlements for the higher wages. Individual settlements ranged from $307 to $10,768.

But, according to the indictment, they weren't allowed to cash those checks.

Instead, intimidated by threats of violence, they had to sign their checks over to Santos' son-in-law and another man who worked for Sands. Both are among the seven who have pleaded guilty.

Santos and Rabinovich also were accused of conspiring to pay a separate general contractor's representative in order to get other federal construction work, the indictment said.

To do that, they allegedly agreed to pay $46,200 in cash to the representative, whose job it was to handle subcontractors' bids.

In return for the cash, the representative allegedly let Santos and Rabinovich have a look at what were supposed to be blind bids, allowing them to undercut the low bidder. As a result, the indictment said, Sands landed 13 federal contracts from October 2009 to January 2013.

The two men are free pending trial on May 28.


Contact Jane Von Bergen at jvonbergen@phillynews.com, @JaneVonBergen on Twitter, or at 215-854-2769. Read her workplace blog at www.philly.com/jobbing

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