Two St. Louis Contractors Plead Guilty to Underpaying Prevailing Wages in Connection with City Sewer Lateral Program

St. Louis, Missouri: Paula Hemm and Alberto Vushaj pled guilty to fraud charges involving their underpayment of prevailing wages in connection with the St. Louis City's Sewer Lateral Line Repair Program, United States Attorney Catherine L. Hanaway announced today.

Paula Hemm assisted in the operation of two construction companies in St. Louis, JKH Contracting and W and V Plumbing and Drainlaying. Alberto Vushaj also assisted in the operation of two construction companies, Vushaj Construction and W and V Plumbing and Drainlaying. Both companies participated in the City of St. Louis Sewer Lateral Line Repair program.

Paula Hemm failed to pay prevailing wages to her workers on projects falling under the Sewer Lateral Line Repair program despite representations to the contrary made on the related Certified Payroll Forms, by a total of approximately $30,969 for jobs falling under JKH Contracting. Vushaj underpaid a total of $36,581 for work performed under Vushaj Construction. Additionally, Hemm and Vushaj underpaid a total of $27,986 for jobs falling under W and V Plumbing and Drainlaying. As a result, the City of St. Louis mailed checks to JKH Contracting, Vushaj Construction and W and V Plumbing and Drainlaying based on these false representations.

St. Louis City's Sewer Lateral Line Repair program is administered by the St. Louis Department of Streets. Sewer lateral lines are the sections of sewer lines that run between residences and main sewer lines. The purpose of the program is to fund necessary repairs to only the sections of sewer lateral lines that are the responsibility of the City of St. Louis, which are sections covered by the City's right-of-ways or easements. These areas typically include sidewalks, tree lines and alleys, and the repairs are funded through property taxes. Once a Streets Department Inspector determines that a repair falls within a covered section of a sewer lateral line, the Department of Streets pays contractors for the repairs.

PAULA HEMM and ALBERTO VUSHAJ each pled guilty to one felony count of mail fraud before United States District Judge Stephen N. Limbaugh. Sentencings have been set for July 9, 2008.

Each mail fraud count carries a maximum penalty of 20 years in prison and/or fines up to $250,000. Additionally, with their pleas, Hemm and Vushaj agreed to pay restitution to their former employees totaling $95,536.

Hanaway commended the work performed on the case by the Department of Labor-Office of Inspector General, the Federal Bureau of Investigation, and Assistant United States Attorney Jeffrey Jensen, who is handling the case for the U.S. Attorney's Office.

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