Pennsylvania Dry Wall Contractor Pleads Guilty to Worker Misclassification
Armando Garcia-Ramirez , 55, of the 2100 block of South Queen Street in York, entered a negotiated guilty plea before Common Pleas Court Judge John Capuzzi to theft by unlawful taking and conspiracy to workers compensation fraud, both felonies of the third degree, as well as improper classification of workers, a third-degree misdemeanor.
Capuzzi sentenced Garcia-Ramirez to time served to 23 months with one year of consecutive probation under a negotiated guilty plea worked out by Assistant District Attorney Elizabeth Schneider , chief of the Economic Crimes Unit, Chief Deputy Attorney General Nancy Walker , who assisted on the case, and defense counsel James Bonner .
Garcia-Ramirez, owner of G&R Drywall and Framing LLC , was charged with his wife and business partner, Martha Guzman , 45, their daughter and employee, Stephanie Garcia Rivera , 26, and Angelita Paulin-Santos , 39, of the 600 block of Smith Street in York, in what county District Attorney Jack Stollsteimer said last month appeared to be the first actual use of a decade-old law aimed at cracking down on worker misclassification.
Act 72 of 2011, dubbed the Construction Workers Misclassification Act, provides that independent contractors must be autonomous, with their own business, performing tasks at "arm's-length" for contractual payment.
According to affidavits of probable cause written by Delaware County Criminal Investigation Division Detective Steven Cortese , the county received a tip of possible workplace misclassification in September 2019 concerning construction of a new L.A. Fitness gym at 2170 West Chester Pike in Broomall.
Cortese and CID Lt. William Wright met with Stephanie Garcia Rivera at the York-based drywall business in November 2019 , according to the affidavit. She allegedly told the investigators that all employees were independent contractors and provided paperwork to that effect for seven individuals.
In speaking with some of those people, Cortese learned that many of their Social Security numbers appearing on employer documents were fraudulent, according to the affidavits. At least two of the workers were undocumented and stated that Armando Garcia-Ramirez knew that some employees were undocumented immigrants.
Investigators also found that employees were paid an hourly wage on a weekly payroll distribution, that none of the "independent contractors" owned a business separate from G&R Drywall and Framing, and that the company gave employees money to buy liability insurance, which was required by the allegedly fraudulent independent contractor contracts the employees had signed, according to the affidavits.
Business records seized under two search warrants executed in November 2020 allegedly revealed that monetary instruments in large quantities were routinely transferred to Hidalgotitlan, Mexico , from the business owners, employees and business address of G&R Drywall and Framing, according to the affidavits. These included vehicles, homes and U.S. currency that the affidavits claim were obtained illegally.
Schneider told the judge Wednesday that Garcia-Ramirez intentionally misclassified more than 30 workers who did not meet the definition of independent contractors under Act 72 in order to avoid paying taxes on their wages.
"Specifically, workers did not have a written contract to perform services, they were not free from control in the performance of their work, and they did not own and operate their own drywall business," she said. "None of the workers had their own tools, made a profit on the contract, had a separate business location (or) independently did the same business for other customers, and the defendant paid for each workers' liability insurance."
Garcia-Ramirez, a Mexican national whose time served dates from Dec. 22 to Feb. 10 , will have to pay restitution of $28,119 , joint and several with the other defendants, under the plea.
Bonner said his client, who has been in the United States off and on for 20 years, will be deported as a result of the guilty plea. The other defendants in the case are not facing deportation, according to Bonner and Schneider.
Guzman, Rivera and Paulin-Santos are all scheduled for a preliminary hearing before Judge Anthony Scanlon March 8 .