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April 30, 2013

East Meadow Diner Owners Plead Guilty to Intentionally Underpaying Employees by $500K

DA’s Labor Unit secures plea; George and Thomas Strifas will pay back wages to 72 employees

MINEOLA, NY – Nassau County District Attorney Kathleen Rice announced today that her office’s Labor Unit has secured a top-count guilty plea from two cousins who own an East Meadow diner for failing to pay 72 employees more than $500,000 in wages.

The plea is the result of a joint investigation between the DA’s Office’s Labor Unit, the United States Department of Labor, Wage & Hour Division, and the New York State Department of Labor, Unemployment Insurance Division (NYSDOL).

George Strifas, 46, of East Hills, Thomas Strifas, 41, of Merrick, and their company, Stardust Diners, Inc., pleaded guilty yesterday to felony counts of Offering a False Instrument for Filing in the First Degree and Falsifying Business Records in the First Degree, and one misdemeanor count of Failing to Pay Wages in Accordance With the New York State Labor Law. George and Thomas Strifas face up to four years in prison at their July 17 sentencing.

As a condition of the plea, the diner owners agreed to pay underpaid minimum wage and overtime of $337,780 and liquidated damages of $163,742 to 72 employees, as well as $48,681 in unemployment insurance to the NYSDOL.

Rice said that the Labor Unit’s investigation into the Colony Diner in East Meadow began when the office was contacted by the USDOL in March 2011. The USDOL had begun a wage investigation into the diner in late 2010. It was revealed through employee interviews that between January 2009 and November 2011, the diner’s wait staff was being paid about $2 or less an hour, the bussing staff was being paid off-the-book from the wait staff’s cash tips, and that kitchen staff was not being paid overtime despite working 50 to 60 hours per week.

State and federal law at the time of the violations mandated minimum wages of $4.65 for wait staff, $7.25 for bussing and kitchen staff, and $10.875 per overtime hour worked.

The investigation also revealed that Colony was paying the majority of its employees off the books, resulting in underpayments of its Unemployment Insurance obligations to New York State. A search warrant executed at the diner in November 2011 revealed falsified payroll and time records and a second set of books with the true pay rate and hours worked by the diner’s employees. Records indicated that the diner claimed on tax returns that only between 11 and 15 people worked at the diner. In reality, they employed between 35 and 40 people in any given week.

“Labor laws exist to ensure that hard-working employees are paid every penny of their wages, as well as hold accountable unscrupulous bosses who steal from their workers,” Rice said. “I thank the federal and New York State Departments of Labor for their invaluable assistance on this case and we will continue to work together to protect the workforce from exploitation.”

“This investigation represents our first collaboration with a local prosecutor’s office involving New York State’s Wage Theft Act,” said Irv Miljoner, Long Island District Director of the U.S. Department of Labor’s Wage and Hour Division.“The results send a clear message to employers that there are real consequences to wage theft and cash off-the-books payments,that underpaying your workers is not the way to do business.We congratulate District Attorney Rice and her staff on this successful effort and look forward to future collaborations on behalf of workers.”

“We have wage laws in New York State for a reason – they’re to protect the most vulnerable workers against injustices by predatory employers so they can feed their families,” said State Labor Commissioner Peter M. Rivera. “I am proud of the Labor Department’s role in bringing these two individuals to justice for purposefully stealing from their employees and am thankful for the Nassau DA’s work to put an end to these kinds of hurtful and illegal practices.”

Labor Unit Chief Richard Balletta is prosecuting the case for the DA’s Office. George and Thomas Strifas and Stardust Diners, Inc. are represented by Collins, McDonald & Gann, P.C. and Milman Labuda Law Group, PLLC.

Since its inception in 2006, the DA’s Labor Unit has a 100% conviction rate. Any employee who thinks they may have been victimized can contact the Labor Unit at (516) 571-1300.