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Roofer to Pay $1.6M in Wage Case

Wednesday, July 1, 2015

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MILWAUKEE--A Wisconsin roofing contractor will pay $1.6 million in restitution and damages after underpaying workers on federally funded housing projects, according to authorities.

Scott Watry, the president and owner of Watry Homes LLC of New Berlin, WI, pleaded guilty June 15 to conspiring to defraud the United States, announced U.S. Attorney James L. Santelle of the Eastern District of Wisconsin.

Westlawn Gardens
Housing Authority of the City of Milwaukee

Scott Watry and Watry Homes LLC received contracts worth $4.7 million on the Westlawn public housing project in Milwaukee. The complex includes multifamily buildings, townhomes and single-family homes for more than 300 residents.

Watry and his business have also agreed to settle related civil False Claims Act allegations.

The company does roofing, siding, and carpentry work on residences, commercial projects, and public housing throughout southeastern Wisconsin.

Underpayment Scheme

In 2011 and 2012, Watry Homes performed contracts worth about $4.7 million on the Westlawn public housing project in Milwaukee. 

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

Watry Homes
Screenshot via www.watryhomes.com

Watry Homes performs roofing, siding, and carpentry work on residences, commercial projects, and public housing throughout southeastern Wisconsin.

According to the plea agreement, Watry conspired with others to pay workers on the Westlawn project hourly wage rates that were considerably lower than that legally required, cheating them out of hundreds of thousands of dollars.

Concealing and Obstructing

To conceal the scheme, the certified payroll reports consistently understated the number of hours worked to compensate for the overstatement of the wage rate paid, prosecutors said. 

In some cases, the payroll reports falsely listed names of purported employees who did not actually work at the site while crew leaders would pay out lower wages to the actual workers. 

In mid-2012, the U.S. Department of Labor began investigating Watry Homes. In response, Watry and co-conspirators provided false information to investigators and encouraged workers likewise to obstruct the investigation, prosecutors said.

James L. Santelle
Official photo

“Contractors should take note that public funds come with strict requirements to pay workers every dollar they are due and to comply with all applicable rules,” said U.S. Attorney James L. Santelle.

Watry has agreed to plead guilty to conspiring to defraud the U.S.  He has also agreed to pay $659,822 in restitution to workers who were underpaid on the Westlawn project. 

DOL will be responsible for distributing the restitution to individual workers, authorities said.

Civil Resolution

In the accompanying civil settlement, Watry and his company have also agreed to pay $1,000,490 in damages for violations of the False Claims Act

The civil settlement resolves a lawsuit filed under the qui tam—or whistleblower—provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring a civil action on behalf the U.S. and share in any recovery. 

The complaint alleged that Watry Homes submitted false certified payroll reports to support claims for payment on the Westlawn project as well as public housing projects in Beloit and Waukesha that were also subject to the Davis Bacon Act. 

“Contractors should take note that public funds come with strict requirements to pay workers every dollar they are due and to comply with all applicable rules,” Santelle said in a statement.

The company did not respond Tuesday (June 30) to a request for comment on the cases.


Tagged categories: Business operations; Enforcement; Ethics; Funding; Housing; Roofing contractors

Comment from Joseph Gilman, (7/1/2015, 2:52 PM)

Now, bar this thief from ever bidding on public projects again

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