Steven Lyon Allegedly Submitted Fraudulent Filings on Behalf of Multiple Construction Industry Clients

Manhattan District Attorney Alvin Bragg, Jr., today announced two indictments of Certified Public Accountant (“CPA”) STEVEN LYON for defrauding the New York State Insurance Fund (“NYSIF”) of more than $10 million dollars in workers’ compensation insurance premium payments by filing doctored payroll-related documents for workers of façade restoration and scaffolding companies. LYON is charged with three counts of Insurance Fraud in the First Degree, five counts of Insurance Fraud in the Second Degree, eight counts of Falsifying Business Records in the First Degree and nine counts of Forgery in the Second Degree in a New York State Supreme Court indictment for this conduct.

LYON engaged in a similar scheme with ANAAR CONSTRUCTION & CONTRACTING CORP. and its owner SADAF BHATTI. The defendants are charged in a New York State Supreme Court indictment with Insurance Fraud in the First Degree, Insurance Fraud in the Second Degree, two counts of Falsifying Business Records in the First Degree and four counts of Forgery in the First Degree.^[1]

In January, LYON was arraigned in New York State Supreme Court for similarly defrauding NYSIF. Today, defendants in that case — ONETEAM RESTORATION, INC., a Long Island City-based masonry subcontractor, and its owner MARIO ROJAS, JR. — each pleaded guilty to one count of Falsifying Business Records in the First Degree and were sentenced to three-year conditional discharges. The case against LYON remains open and pending.
 
“These alleged lies are not just numbers on paper – they hurt the financial wellbeing of hardworking construction workers. These companies saved millions in premiums at the expense of their employees and left New York taxpayers on the hook for the bill,” said District Attorney Bragg. “The New York State Insurance Fund provides critical insurance coverage to injured workers, who should be afforded every protection while working dangerous construction jobs.”
 
“Insurance fraud, including workers’ compensation fraud, costs honest companies and employee tens of millions of dollars every year,” said Gaurav Vasisht, Executive Director & CEO of the New York State Insurance Fund. “We work hard to educate injured workers, companies, and the medical community on spotting and reporting fraud, and we’re grateful to District Attorney Bragg and his office for holding bad actors accountable.”
 
According to court documents and statements made on the record in court, ANAAR, a Fresh Meadows-based masonry subcontractor specializing in building façade repairs and waterproofing, and BHATTI, its owner, utilized LYON to complete its “Premium Audits.” Though the company had a privately retained tax accountant, LYON acted as the company’s representative during NYSIF’s mandatory annual audits.
 
As alleged, from March 10, 2018, to March 10, 2020, LYON filed payroll-related documents with DOL and NYSIF, the New York State’s largest workers’ compensation provider. The filings with NYSIF drastically reduced the size of ANAAR’s workforce and payroll. NYSIF relied on these false documents to calculate ANAAR’s workers’ compensation insurance premiums, grossly under-charging the company as a result. Over the course of the scheme, ANAAR underreported its payroll by more than $4.5 million dollars and underpaid NYSIF by more than $1.4 million dollars.
 
LYON is solely charged in a separate indictment for running a similar scheme related to audits and filings for two Long Island City-based companies, DNA Contracting LLC., and Spring Safe & Sound Inc. As alleged, from January 1, 2019, to March 1, 2022, LYON misrepresented the total workforce and payroll for both companies during quarterly filings thereby defrauding NYSIF of more than $9.4 million dollars.

This week, May 1-5, 2023, is National Construction Safety Week, an annual industry-wide education and awareness event. New York City agencies, led by the Department of Buildings, raise awareness across the city to talk to contractors and workers about work site safety. As part of the Manhattan Construction Fraud Task Force, the Manhattan District Attorney’s Office investigates wage theft, safety hazards, fatalities and fraud in the construction industry. To report an incident, call 646-712-0298. Our office is a safe place to report crime, regardless of immigration status.

Assistant D.A.s Christopher Beard and Garrett Baldwin are handling the prosecution of the case under the supervision of Assistant D.A.s Michael Ohm (Deputy Chief of the Rackets Bureau), Judy Salwen (Principal Deputy Chief of the Rackets Bureau), and Jodie Kane (Chief of the Rackets Bureau and Acting Chief of the Investigation Division). Senior Rackets Investigator Anthony Santoro and paralegal Camilla Cox are assisting with the case.

D.A. Bragg thanked the New York State Insurance Fund’s Director of Investigations Jessica Silver, Investigative Officer 2 Elaine Leach, Investigative Officer 1 Dominick Raspante, and Forensic Auditor Winston Sapigou; the New York State Police’s Special Investigations Unit Senior Investigator Mark Buglione and Investigator Brahim Dedusevic, the New York State Department of Labor’s Auditor Ladislao Batista, Jr.; and the Bergen County, N.J., Prosecutor’s Office. 
 
Defendant Information:
 
STEVEN LYON
Edgewater, NJ

Charges:

• Insurance Fraud in the First Degree, a class B felony, 4 counts
• Insurance Fraud in the Second Degree, a class C felony, 6 counts
• Forgery in the Second Degree, a class D felony, 13 counts
• Falsifying Business Records in the First Degree, a class E felony, 9 counts

 
ANAAR CONSTRUCTION & CONTRACTING CORP.
Queens, NY

Charges:

• Insurance Fraud in the First Degree, a class B felony, 1 count
• Insurance Fraud in the Second Degree, a class C felony, 1 count
• Forgery in the Second Degree, a class D felony, 13 counts, 4 counts
• Falsifying Business Records in the First Degree, a class E felony, 2 counts

 
SADAF BHATTI
Queens, NY
 
Charges:

• Insurance Fraud in the First Degree, a class B felony, 1 count
• Insurance Fraud in the Second Degree, a class C felony, 1 count
• Forgery in the Second Degree, a class D felony, 13 counts, 4 counts
• Falsifying Business Records in the First Degree, a class E felony, 2 counts

^[1] The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.

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