Manhattan District Attorney Alvin Bragg, Jr., today announced the sentencings of SADAF BHATTI, 40 and his company, ANAAR CONSTRUCTION & CONTRACTING CORP., pursuant to their November 2, 2023, New York State Supreme Court guilty pleas to Insurance Fraud in the First Degree for their role in Certified Public Accountant STEVEN LYON’s scheme to defraud the New York State Insurance Fund (“NYSIF”) of more than $18 million. BHATTI was sentenced to 1-to-3 years in state prison and ANAAR CONSTRUCTION & CONTRACTING CORP. was sentenced to a three-year conditional discharge.
Today’s proceedings mark the final sentencings of all of the individuals and corporations charged in connection with this investigation. In total, $7,750,000 in restitution was returned to NYSIF in connection with these cases.
On October 19, 2023, LYON was sentenced to 2 1/3-to-7 years in state prison after pleading guilty to three counts of Insurance Fraud in the First Degree. On June 5, 2023, Long Island City-based DNA CONTRACTING LLC and SPRING SAFE & SOUND INC. pleaded guilty to Falsifying Business Records in the First Degree and were sentenced to three-year conditional discharges. On May 4, 2023, 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. On June 5, 2023, WILLIAM KNIGHT pleaded guilty to one count of Falsifying Business Records in the First Degree and was sentenced to a three-year conditional discharge. Finally, on July 26, 2023, ANTAL HALASZ pleaded guilty to one count of Criminal Facilitation in the Fourth Degree and was sentenced to a one-year conditional discharge.
“These business owners exploited their workers – primarily undocumented, vulnerable New Yorkers – by devaluing their payrolls and scheming to avoid insurance premiums,” said District Attorney Bragg. “Moreover, Steven Lyon abused his role as a Certified Public Accountant, casting aside his fiscal duties at the expense of workers performing dangerous jobs. Thanks to the attorneys in my office and our many law enforcement partners, we returned $7,750,000 to the New York State Insurance Fund through this prosecution.”
New York State Insurance Fund Executive Director & CEO Gaurav Vasisht said, “Fighting fraud is a key component of ensuring that New York employers receive the lowest possible cost workers’ compensation and disability insurance. I would like to thank D.A. Bragg for his partnership in holding bad actors accountable and protecting the state’s businesses and their employees.”
Sadaf Bhatti and Anaar Construction & Contracting Corp.
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 admitted in the defendant’s guilty plea, 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.
Mario Rojas Jr. and OneTeam Restoration, Inc.
According to court documents and statements made on the record in court, ONETEAM, a Long Island City-based masonry subcontractor specializing in building façade repairs and waterproofing, and ROJAS, its owner, hired LYON to prepare and file the company’s “Quarterly Payroll Reports” with the New York State Department of Labor, as well as its yearly state and federal tax returns. LYON also acted as the company’s representative during NYSIF’s mandatory annual audits.
As admitted in the defendants’ guilty pleas, from January 1, 2019, to May 15, 2021, LYON used separate email accounts to file payroll-related documents with the Department of Labor and NYSIF. While the filings submitted to DOL were accurate, the filings submitted to NYSIF were doctored to drastically reduce the size of ONETEAM’s workforce. NYSIF relied on these false documents to calculate ONETEAM’s workers compensation insurance premiums, grossly under-charging the company as a result. Over the course of the scheme, ONETEAM underreported its payroll by more than $16 million, and underpaid NYSIF by more than $7 million.
Spring Safe & Sound Inc. and DNA Contracting LLC
LYON also pleaded guilty to running a similar scheme related to audits and filings for two Long Island City-based companies, DNA Contracting LLC, and Spring Safe & Sound Inc. 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.
Two executives associated with Spring Safe & Sound, WILLIAM KNIGHT and ANTAL HALASZ, also pleaded guilty in connection with this investigation.
Since 2020, the Rackets Bureau has secured 21 convictions related to NYSIF fraud investigations, resulting in the return of more than $17,230,000 to NYSIF.
Assistant D.A.s Christopher Beard (Senior Supervising Attorney for Labor Racketeering) and Garrett Baldwin handled 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 assisted with the cases.
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.