A North Branford construction company has been hit with a $200,000 fine for underfunding its retirement plan and filing a false tax return.
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHERRY HILL CONSTRUCTION, INC. was sentenced to three years of probation and a fine of $200,000 for underfunding its retirement plan and filing a false tax return.
The charges stem from the company’s admission that it underfunded its retirement plan by approximately $950,000 in 2010 and 2011. The company also admitted to inflating its actual contribution to the plan in its corporate tax return for the 2010 tax year, resulting in an increased employee benefit deduction.
According to court documents, CHERRY HILL CONSTRUCTION, INC. provides statewide service in site development, on-site crushing, trucking, demolition, as well as roll-off dumpsters, top soil, aggregates and landscaping. The company was awarded and completed prevailing wage construction projects, requiring payment of the prevailing wage rate plus the fringe rate.
The fringe rate is the cost of benefits to the employee. When a company is awarded a prevailing wage project, it must submit certified payrolls that list the hours, prevailing wage rate and fringe they are paying each employee. The company can either pay the employee the fringe directly or open a benefit plan with the fringe payment being deposited into an account for the benefit of that employee.
CHERRY HILL CONSTRUCTION, INC. opened a profit sharing/401(k) plan that was covered under ERISA. The company has fully funded its retirement plan and paid $193,000 in back taxes, interest and penalties.
The matter was investigated by the Internal Revenue Service – Criminal Investigation Division; U.S. Department of Labor – Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; U.S. Department of Labor – Employee Benefits Security Administration, and U.S. Department of Transportation – Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Defendant: CHERRY HILL CONSTRUCTION, INC.
Criminal Charges: One count of filing a false tax return, and one count of making a false statement in relation to documents required by the Employee Retirement Income Security Act of 1974 (ERISA).
City and State: North Branford, Connecticut
Exact Date: CHERRY HILL CONSTRUCTION, INC. pleaded guilty on January 13, 2015.
Sentence or Outcome: Three years of probation and a fine of $200,000.
Dollar Amounts: $200,000 fine, $950,000 underfunding of retirement plan, $193,000 in back taxes, interest and penalties.
Related Federal Cases
- SRC Construction, Filing a False Tax Return, Connecticut 2006 · Kentucky
- Justin C. Freeman, Filing a False Tax Return, Connecticut 2019 · Kentucky
- Michael Callan, Filing a False Tax Return, Connecticut 2019 · New Jersey
- Scott Benincasa, Filing a False Tax Return, Connecticut 2015 · Illinois
- Wayne Margarum, Sr., Willful Failure to File an Income Tax Return, Connecticut 2023 · Washington
Key Facts
- State: Connecticut
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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