St. James contractor evades taxes on illegal labor
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July 7, 2007
A subcontractor who provided carpenters to many large-scale home building projects on Long Island pleaded guilty Friday to failing to pay federal taxes on the wages of his workers, many of whom were illegal immigrants from Ecuador working off the books, according to officials.
The plea by Jay Kuhn, the head of Kuhn Brothers Construction of St. James, is just the start of a large-scale federal investigation into illegal practices in the construction industry on Long Island that cheat the government out of tax revenue, according to sources familiar with the investigation.
Kuhn pleaded guilty to one count of evading payroll taxes on his workers' wages for the last quarter of 2005, as part of a plea bargain with the Internal Revenue Service in U.S. District Court in Central Islip. He faces between 21 months and 27 months in prison and must pay almost $400,000 in withholding taxes to the IRS as part of the plea.
Kuhn's company employs dozens of carpenters who specialize in framing - erecting the wooden structure of buildings. But his attorney said Kuhn was not solely to blame.
"My client is the victim of a bad immigration policy, caught between immigrants willing to work for low wages and home builders who want the lowest cost," said James O'Rourke of Hauppauge.
O'Rourke said that his client had tried to help some of his workers become citizens, even hiring lawyers for them, but that it was a time-consuming process. He added that many of Kuhn's workers would work only if they were paid off the books.
But Antonio Martinez, an organizer for the Empire State Regional Council of the Carpenters Union, who was in court Friday, said Kuhn's company was part of "a cancer in the industry," in which illegal immigrants are willing to take lower wages, driving down the pay for all carpenters while builders look the other way.
He noted that union carpenters on Long Island earn about $30 an hour plus fringe benefits, while Kuhn was paying at most $12 an hour.
"We want decent wages for all carpenters," Martinez said.
Spokesmen for home builders that employ Kuhn as a subcontractor could not be reached for comment.
Assistant U.S. attorneys Charles Kelly and Carrie Capwell declined to comment.
Joseph Foy, a spokesman for the Criminal Investigation Division of the IRS, would say only that the investigation is continuing.
Kuhn pleaded guilty to reporting that he had paid his workers $45,000 and paid $12,000 in Social Security and other withholding taxes to the government in 2005. In actuality, Kuhn's company had paid the workers $288,998 and owed $86,416 in withholding taxes, according to the IRS investigation.
Eleven other counts charging that since 2003 Kuhn's company had failed to report $1.3 million in wages on which he did not pay $394,788 in withholding taxes were dropped as part of the plea bargain. But Kuhn will have to pay those taxes to the IRS as part of the plea.
Bob Wieboldt, executive vice president of the Long Island Builders Institute, said it's hard to quantify how widespread the use of undocumented workers is in the local construction industry because of the chain of subcontracting and sub-subcontracting. But he said a number of home-improvement contractors who are builders institute members have complained about losing bids to companies that undercut them by using undocumented workers and paying lower wages.
Despite the charges, a builder who has subcontracted framing work to Kuhn Brothers for about 10 years said the company always does a good job.
"They've done quality work," said Tom Vohrer, who owns Briarcrest Development Corp. in Patchogue. "I've known them since they were kids and they are great people ... I would vouch for them any day of the week."
Staff writers Carrie Mason-Draffen and Gary Dymski contributed to this story.
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Although Newsday outlines it with their typical bias, every fool could look at this story and see it for what it is. That as much as the corporate media and the politicians outline supporting amnesty for illegal immigrants as "the right thing to do" and "they're just here to work and raise their families" and whatever other nonsense they come up with, it's really about slitting the throat of the American worker. If you took Economics in school, you'll know that when a sudden glut of an untrained labor market enters the picture, wages fall. This guy who is facing charges would have had to hire professional American carpenters if our country had a sensible immigration policy and strong borders. These carpenters command wages of around 30 dollars an hour. But no, thanks to our weak policies, this man was able to get immigrant carpenters for a little more than a third of the price. In nearly every sector of the labor market, Americans are at risk of being undermined by illegal immigrants. It's not a matter of immigrants doing work that Americans won't, it's a matter of them doing work that we can't afford to do. The average American can't work for a third of what they're used to getting paid because they don't live ten to a room.
I saw a movie recently called "Fast Food Nation." I also read the book many years ago. I suggest checking them both out. Both show that the meat-packing industry consists largely of illegal immigrant workers. The average person reared on propaganda, or just misguided, would think "what American would want to do this work, it's hellish, that's why we need the immigrants" probably doesn't know that up to 30 years ago, meat-packing was a unionized job. There were even waiting lists to get into meatpacking. But illegal immigration changed that. Whether by design or by incompetence, industries like the meatpacking industry saw a huge potential windfall in labor savings (and hence, higher profits of course) as our borders loosened and more people came across the border illegally.
The media and the politicians simplify the issue so that whoever is against it or critical of it (which I'd estimate at being around 80 or even 90 percent of the population) is only against it because the illegals are mostly South Americans and we hate Mexicans. In most cases, that is simply not true and is obviously only a ruse to suppress debate. Don't fall for it. The immigration issue practiced by the media is just a smokescreen for what this is really about. I think we had more balanced coverage on the run-up to war with Iraq, which is a scary thing. While I am not conservative on many issues, this is one in which I have to stand behind them 100 percent. The "immigration reform" bill was recently defeated due to a vast public outcry, but it'll be back. So keep calling and writing letters to your congressmen and senators.
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