Construction Company Allegedly Used Cash Payroll to Defraud New York State Insurance Fund of Over $9 Million
Check Cashing Business Also Indicted for Conspiracy
Manhattan District Attorney Alvin L. Bragg, Jr., today announced the indictment of the SCHNELLBACHER-SENDON GROUP, LLC (“SSG”), its owners, and executives and managers, for using fictitious shell companies to steal more than $9 million in unpaid workers’ compensation premiums from the New York State Insurance Fund (“NYSIF”) by failing to report at least $40 million in cash payroll for more than 100 employees from 2017 to 2024. The defendants are charged in a New York State Supreme Court indictment with Conspiracy in the Fourth Degree and Money Laundering in the First Degree. Certain defendants are also charged with various counts of Insurance Fraud in the First Degree and Falsifying Business Records in the First Degree.[1]
“This indictment captures an alleged conspiracy that stretched from a construction company to the check cashing business that generated its $40 million unreported payroll,” said District Attorney Bragg. “NYSIF provides an important service in a city where construction is never-ending, and fraud impacts its ability to make injured workers whole. My Office’s Rackets Bureau followed the money, working with numerous enforcement partners here and in New Jersey, to put an end to this alleged scheme.”
“Fraud impacts the entire workers’ compensation system, raising costs for all businesses and putting workers at risk,” said Gaurav Vasisht, Executive Director & CEO of the New York State Insurance Fund. “This indictment highlights the need for vigilance in rooting out fraud and we’re grateful to D.A. Bragg and his office for their partnership.”
According to court documents and statements made on the record in court, SSG is a New Jersey-based construction company that performs large scale facade work in the New York City area. ERIC SCHNELLBACHER and VALERIANO SENDON are its owners; JESUS SENDON is its vice president; KAROLINA KAMINSKA A/K/A KAROLINA COLE is its office manager; and ARTEMIO MONTILLA is its project manager.
From 2017 to 2024, the SSG defendants allegedly used fictitious shell companies to generate $40 million in unreported cash payroll for over 100 employees. To obtain this cash, they conspired with JOSEPH LOPRESTI and CECILIA ORTIZ VARGAS, the owner and manager, respectively, of a commercial check cashing business called CHECK PROS in Carteret, New Jersey.
SSG, a NYSIF client since 2016, allegedly underreported the size of its payroll and misrepresented the type of work its employees were performing. From 2017 through 2024, through numerous falsified business records, SSG represented to NYSIF that it only had 18 employees performing office work. In reality, during this time, SSG allegedly earned over $80 million and employed up to 125 construction workers at over a dozen job sites. To further conceal this fraud, SSG allegedly represented to the New York State Department of Labor in 2020 that it was no longer doing construction work in New York.
As part of the scheme, SSG allegedly created fictitious subcontractor corporations and used a separate bank account to write checks from these companies to generate unreported payroll. These checks were exclusively cashed at CHECK PROS. LOPRESTI and VARGAS allegedly established accounts at CHECK PROS using fraudulent identification and filed Currency Transaction Reports attributing the cashed checks to these fictitious subcontractors.
Each week, JESUS SENDON or KAMINSKA contacted LOPRESTI or VARGAS at CHECK PROS to communicate how much cash they would need for the week, ranging from $120,000 to $150,000. SSG then wrote checks for that amount to one of the fictitious subcontractors. A few days later, an SSG employee cashed one or more checks written from SSG to the fictitious company at CHECK PROS. The cash payroll was distributed to the unreported SSG employees each Friday at SSG’s jobsites.
SSG also allegedly created a fictitious subcontractor to cover any workers’ compensation insurance claims made by unreported SSG employees. When an unreported SSG employee made a workers’ compensation claim, SSG and MONTILLA reported to NYSIF that the individual was an employee of this fictitious subcontractor.
In June 2024, in collaboration with the New Jersey Attorney General Office’s Criminal Justice Division, the Belleville Police Department, Carteret Police Department, and the New York State Police, the Manhattan D.A.’s Office executed court-authorized search warrants at CHECK PROS’s and SSG’s offices. From CHECK PROS, investigators recovered the account folders for the fictitious subcontractors, which contained photocopies of fake identifications and a notebook showing its connection to SSG. From SSG’s offices, investigators recovered documents that showed that SSG was actively working 11 jobsites with approximately 125 employees. Investigators also recovered payroll lists and unfiled withholding documents of over 430 individuals who had worked for SSG during the time of the alleged conspiracy.
When JESUS SENDON learned about the execution of the search warrant at SSG, he called SSG employees and told them to shut down the jobsites in New York to hide his employees, including saying “I need you to tell them within the hour to shut the jobs down.” He is charged with Tampering with Physical Evidence.
Senior Investigative Counsel Edward Burns and Assistant D.A. Soraya N. Attia are handling the prosecution of the case under the supervision of Assistant D.A. Christopher Beard (Deputy Chief of the Rackets Bureau), Assistant D.A. Christopher Conroy (Chief of the Rackets Bureau), Judy Salwen (Deputy Chief of the Investigation Division), and Executive Assistant D.A. Jodie Kane (Chief of the Investigation Division). Investigators May Dempsey and Lt. Daniel Clark-El are assisting with the case, as are Discovery Analyst Robert Woolf and Trial Preparation Assistant Andrew Glass, and Principal Financial Investigator Loretta Mapp. Former Analyst Simon Otero and former Trial Preparation Assistant Shriya Shinde assisted with the investigation.
District Attorney Bragg thanked Senior Investigator Mark Buglione and Ret. Investigator Brahim Dedusevic of the New York State Police; Investigator Patrick Longo, Auditor Granville Mo, and Ret. Investigator Dominick Raspante of the New York State Insurance Fund; and Deputy Bureau Chief Gezim Bajrami and Det. Sgt. John Cicchino of the New Jersey Attorney General’s Office, Criminal Justice Division.
###
[1] The charges contained in the indictment are merely allegations and the defendants are 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.