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Bay Area Painting Contractor Charged with Cheating on Wages, Workers’ Comp Fraud

Monday, January 30, 2012

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A San Francisco painting contractor is facing criminal charges after authorities said she cheated employees out of more than $600,000 in wages and failed to pay more than $100,000 in workers’ compensation insurance premiums.

 Doherty Restoration Inc.
 Doherty Restoration Inc. website's home page.

Frances Ann Doherty, owner of Doherty Painting & Construction, was charged Friday with 57 counts of wage theft, workers’ compensation insurance premium fraud and other illegal actions. She was released after posting bond, a spokesman for the San Francisco District Attorney’s office told Durability + Design.

The district attorney’s office said Doherty, 51, of Millbrae, Calif., failed to pay the prevailing wage rate to workers for projects for the city of San Francisco, the San Francisco Unified School District and other public agencies.

Contractors awarded work on public projects are required to pay workers the prevailing wage and provide verification that the appropriate wages were paid.

Court documents show Doherty had contracts for 23 different public projects, but investigators determined her employees were paid only a fraction of the wages to which they were entitled.

“The crimes we have charged against this employer are extremely serious,” San Francisco District Attorney George Gascón said in a statement issued by the district attorney’s office.

“In order to win dozens of painting contracts with the city, the defendant promised to pay her workers San Francisco’s prevailing wage, and job after job allegedly submitted false documentation showing that she did so,” Gascón said, “We intend to prove that over the course of three years the defendant underpaid her employees and pocketed over $600,000 that the City thought it was paying for those wages, and defrauded her workers’ compensation insurance carriers out of over $100,000 in insurance premiums.”

Joining the district attorney’s office in conducting the investigation of Doherty was the office of the California Department of Insurance. Dave Jones, insurance commissioner, said, “This conduct not only victimizes workers who are desperately trying to make a living in a very tough economy, it also hurts the honest businesses that were unable to successfully compete for these projects which the defendant was able to underbid and win as a result of this scheme.”

Doherty allegedly provided fraudulent employee payroll information to Redwood Fire & Casualty Insurance Company and to Zurich Insurance from September 2006 through June 2009, which enabled her to pay lower workers’ compensation insurance premiums to these carriers, the district attorney’s office said. Authorities alleged that the total loss to the insurance carriers as a result of the premium fraud is $108,000.

Doherty was charged with 23 felony counts of violating Penal Code section 115(a), filing or recording false records in a public office; 23 felony counts of violating Labor Code section 1778, theft of wages by an employer on a public contract; eight felony counts of violating Penal Code section 132, offering fraudulent documents in a lawful investigation; and three felony counts of violating Insurance Code section 11760(a), making false representations to reduce insurance premium rates.

An internet search for information about Doherty Painting & Construction indicates that the company currently operates under the name Doherty Restoration Inc. The company’s website (www.dohertyrestoration.com) says the business is engaged in construction, restoration, painting, and lead remediation. The site also indicates the business is lead-safe certified by the EPA.

An individual answering the phone at Doherty Restoration Inc. hung up when a representative of Durability + Design asked if the company was the same as Doherty Painting & Construction.

The website says the company has “successfully completed projects on some landmark sites in the Bay Area,” including exterior painting of Candlestick Park, the San Francisco Conservatory of Flowers, San Francisco’s U.S. Customs House, and many schools and churches.


Tagged categories: Contractors; Criminal acts; Enforcement

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