The owner of a Bay Area-based construction company is facing jail time, probation and about $250,000 in restitution fees for cheating the workers’ compensation insurance system and wrongfully firing injured workers.
Man Tat Szeto, 71, who owns MT Szeto Construction, admitted to his illegal behavior after multiple former employees reported in late 2018 they’d been fired after asking for medical treatment for injuries they sustained at work. Those employees also reported they often worked unpaid overtime, clocking upwards of 70 hours in a week, but only being paid for 40 hours.
But after a long week of overtime in a physically demanding industry, if a worker injured themselves while on the job and then told their boss, Szeto had a habit of simply handing the employee cash and then terminating them, rather than file a claim and risking an insurance premium increase, according to the Santa Clara County District Attorney’s Office.
“When unscrupulous employers refuse to pay fair hourly wages, cheat on taxes, and cover-up workplace injuries, they exploit vulnerable individuals as well as our community which must bear the cost of illegality,” Deputy District Attorney Mattia Corsiglia said in a prepared statement.
The DA got involved in the case after the California Contractors State License Board reported “suspicious activity” at a new—but so far unnamed—residential construction project in San Jose.
Szeto avoided about $86,000 in premium payments to his insurer by not reporting such injuries between 2016 and 2019, according to the DA’s office. He also laundered $165,000 by paying employees off “off the books.”
As part of his plea agreement, Szeto was charged with unemployment insurance tax fraud and money laundering and will spend five years on probation, nine months in county jail and pay restitution of approximately $250,000.