Massachusetts Company Busted for Defrauding Union Benefit Funds

BOSTON, MA -AQE, Inc., an asbestos removal company based in Windham, New Hampshire, has pleaded guilty to a scheme that allowed it to defraud the Massachusetts Laborers Benefit Fund (MLBF).

The company used a second corporate entity, Air Quality Experts, Inc., to pay union members at non-union rates without providing union benefits. This scheme, known as a ‘double-breasted shop,’ enabled AQE, Inc. to evade paying hundreds of thousands of dollars to the MLBF, which provides medical and pension benefits to 8,000 laborers and their families in Massachusetts.

AQE, Inc. employed members of Tewksbury Local 1421 of the Laborers International Union of North America and paid them from the payroll of its own union signatory corporation. However, when the jobs did not require a union signatory company, union members were paid from the payroll of Air Quality Experts, Inc., which resulted in lower wages and no benefits for the workers.

The company also submitted ‘remittance reports’ to the MLBF that failed to report thousands of hours worked by members of Local 1421. As a result, AQE, Inc. underpaid the MLBF by hundreds of thousands of dollars.

AQE, Inc. has agreed to pay $500,000 in restitution to the MLBF as part of its plea deal. The company faces up to five years of probation, a fine of $500,000 or twice the loss or gain from the offense, and restitution.

The case was investigated by the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, and the Employee Benefits and Security Administration. Assistant U.S. Attorneys Fred M. Wyshak, Jr. and Ryan M. DiSantis are prosecuting the case.

AQE, Inc. is scheduled to be sentenced on May 4, 2017. The charges against the company carry a sentence of at least one year and no greater than five years of probation, a fine of $500,000 or twice the loss or gain from the offense, and restitution.