­­­­­­­­L.I. diner owners face prison after serving up a side of fraud — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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­­­­­­­­L.I. diner owners face prison after serving up a side of fraud

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in Human Resources,Overtime Labor Laws

The owners of a Nassau County ­diner face up to four years in prison after a joint federal/state investigation found massive payroll and tax fraud at the restaurant. They pleaded guilty to several felony and misdemeanor counts alleging wage-and-hour violations and shady bookkeeping.

According to state and federal investigators, waiters at the Colony Diner in East Meadow were paid $2 or less per hour. The owners skimmed the waitstaff’s cash tips to pay busboys off the books, and never paid the kitchen staff overtime even though they often worked 50 to 60 hours per week.

All of the “off-the-books” payroll resulted in a severe underpayment of unemployment compensation premiums.

When investigators executed a search warrant, they found two sets of books: one matching the company’s tax returns and one that showed what was really happening. For example, the diner reported employing between 11 and 15 employees when the real numbers ranged from 35 to 40.

In addition to the potential jail time, the owners and their company will pay 72 employees $337,780 in underpaid minimum wage and overtime, plus liquidated damages of $163,742. They will also pay $48,681 in back unemployment insurance premiums.

Note: Local, state and federal regulators are serious. The Nassau County District Attorney’s Office Labor Divi­­sion has a 100% conviction rate. Have your attorney review all your payroll practices.

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