(The Center Square) – Pennsylvania Attorney General Josh Shapiro said Thursday his office filed theft charges against one of the state’s largest contractors, accusing the company of violating prevailing wage laws and stealing millions from its employees.
Glenn O. Hawbaker, based in State College, received more than $1.7 billion from the Pennsylvania Department of Transportation between 2003 and 2018 for road and bridge construction projects across the state, often undercutting other companies’ bids through a complex scheme that its used for decades, Shapiro said, to pocket more than $20 million in stolen wages and health benefits.
And it’s far from the only contractor to do so, Shapiro said, noting that his office is “actively” investigating other cases where companies violated prevailing wage laws, which set a rate workers on state-funded construction projects must be paid through a combination of salary and benefits.
“This is the third in a series of prosecutions related to wage theft and misclassification over the last few months, and it isn’t the last," he said.
Last month, Centre County contractor Scott Goode pleaded guilty to stealing more than $64,000 in wages and benefits from his workers on a $16 million PennDOT project in Clearfield County dating back to 2014.
Shapiro then put “employers … on notice” that his office will hold every bad actor accountable “so Pennsylvania workers receive the wages and benefits owed to them under the law.”
“This is the largest prevailing wage criminal case on record – under Pennsylvania prevailing wage law and across the United States under federal law,” he said. “My focus now is on holding Hawbaker accountable for breaking the law, and getting these workers their money back.”
The office opened an investigation into Hawbaker in 2018 after a Centre County resident, Harry Ward, asked PennDOT to rectify the discrepancies he found in his retirement account after working 30 years for the company.
A probe of Hawbaker’s financial records revealed that the company siphoned money from thousands of workers’ retirement accounts to pay pensions for executive-level employees to the tune of $15 million over the last six years, Shapiro said. The statute of limitations prevents his office from charging for any theft before 2015, he said.
The company also inflated health care expenses through fraudulent billing to appear as if workers were receiving benefits owed to them under the state’s labor laws. Instead, Shapiro said, Hawbaker pocketed the difference.
In court documents, Shapiro’s office said the company claimed its health and welfare benefits cost between $14 and $17 per hour – far higher than the $4 to $7 an hour the company actually paid.
He thanked Ward for coming forward. In court documents, Shapiro’s office said PennDOT first hired Hawbaker in 1990 and was the company’s largest government client in 2018 when the investigation began.
“Harry, you were right, and I want to thank you for sounding the alarm,” he said. “You’re the hero in this story and we are grateful to you.”
Shapiro said Hawbaker remains cooperative with the probe, for now.
In a statement to PennLive, the company said it “believes we have always acted in accordance with all state and federal laws.”