RICHMOND, Va. (WRIC) — Two subcontractors working on the new Virginia General Assembly office building project have each been charged with 10 counts of felony embezzlement following an investigation into accusations that they misclassified their workers as independent contractors to avoid paying them the proper wages and various taxes.
Attorney General Mark Herring announced the indictments brought against the two labor brokers, GTO Drywall and Richmond Drywall Installers Constructors, on Wednesday after an investigation from the Office of the State Inspector General and the AG’s new Worker Protection Unit.
The Chesterfield-based drywall companies have been accused of misclassifying the laborers they hired for the project to avoid paying payroll taxes to the Commonwealth and “to avoid withholding premiums for worker’s compensation,” the attorney general’s office said.
A multi-jurisdiction grand jury indicted GTO and RDIC on 10 counts of felony embezzlement, the first worker misclassification charges from the Worker Protection Unit, according to Herring.
In December, 8News reported on a federal class-action lawsuit filed against Capital Interior Contractors, a Richmond-based drywall subcontractor, GTO and RDIC on behalf of laborers accusing the subcontractors of wage theft.
GTO Drywall and Richmond Drywall Installers Constructors were selected by Capital Interior Contractors to hire workers for construction projects across the commonwealth, including for the new General Assembly building, the lawsuit claims.
In the lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, the workers allege they were not paid overtime after being intentionally misclassified as independent contractors instead of employees.
RDIC could not be reached Wednesday but a man who identified himself as a supervisor at GTO Drywall over the phone said he didn’t know about the charges. He directed 8News to Matthew E. Feinberg, the lawyer defending the drywall company in the class-action lawsuit, who said “GTO has no comment.”
Stay with 8News for updates to this developing story.