Media, PA – Delaware County District Attorney Jack Stollsteimer, Montgomery County District Attorney Kevin Steele, and Attorney General Michelle Henry announced the filing today of criminal charges against paving contractor Joshua Dallas, doing business as Monster Paving, LLC (“Monster”) based in North Wales and Ambler, Pennsylvania. Defendant Dallas has been charged with Worker Misclassification under Pennsylvania Act 72, The Construction Workplace Misclassification Act (“Act 72”). The criminal conduct is alleged to have occurred in connection with the Meadowgreen Park project on behalf of Springfield Township and the Gateway Slopes project on behalf of the Borough of Lansdowne.
“Worker misclassification is a crime, and – as our previous prosecutions have demonstrated – my office is committed to making sure that business owners understand that there will be consequences for breaking the laws designed to protect our workers. Worker misclassification is theft: it deprives the Commonwealth of revenue, as well as depriving workers of the protections that our laws are intended to provide,” said District Attorney Stollsteimer. “We will continue to collaborate with investigators throughout the Commonwealth and with the Fair Labor Section of the Attorney General’s Office to investigate and hold companies who cheat Pennsylvania workers criminally accountable,” said Stollsteimer.
Act 72 criminalizes the misclassification of employees as “subcontractors.” Hourly-wage employees who work at the direction of the same individual every day do not become “independent contractors” just because their employer chooses to characterize them as such. Under the Act, unscrupulous employers who attempt to circumvent employment requirements and protections by misclassifying their employees face a criminal charge for the act of misclassification. An employer’s use of Federal Internal Revenue Forms 1099-NEC (Non-Employee Compensation) or 1099-MISC (“1099”) are indicative of an Act 72 misclassification violation, as the employer does not calculate the Workers’ Compensation Act and Unemployment Compensation contributions. Rather, the use of a 1099 for employees demonstrates that the employer is improperly treating an employee as an independent contractor.
“Not paying employees the wages they are entitled to by using 1099 forms is criminal. Further, it is taking advantage of workers who need the additional protections provided by wage payroll income—and that is taking money out of their pockets down the line,” said Montgomery County District Attorney Kevin Steele. “Employers need to take note: we will prosecute these laws and these cases.”
“Worker misclassification is a serious problem that affects local businesses, workers, and taxpayers. I am grateful for the work of District Attorney Stollsteimer, District Attorney Steele, and all of our law enforcement partners who came together to assist in this investigation and hold those accountable who choose to exploit workers and manipulate the system for their own benefit,” said Attorney General Michelle Henry.
With the assistance of Edward Lounsberry of the Pennsylvania Foundation for Fair Contracting, Detective Edward Rosen of the County’s Criminal Investigation Division conducted interviews with two individuals employed by Monster. Richard Giangiulio was employed by Monster from 2019 to 2022 as a heavy equipment operator. Giangiulio received a Federal Internal Revenue Form 1099-NEC (Non-Employee Compensation) (“1099”) for $9,418.00 in wages for his work. Flavio Quito was also employed by Monster, working on the Gateway Slopes project in Lansdowne Borough. Flavio received a 1099 from Monster in 2019 for earnings in the amount of $3,081.88, and a 1099 in the amount of $7,000.00 in 2021. Both Giangiulio and Flavio functioned as employees, not independent contractors, and should have been paid through the company’s payroll system.
In cooperation with the Montgomery County Detective Bureau – which was simultaneously investigating Monster and Dallas — a search warrant was executed in April 2022 at the location of the Monster offices and the Dallas residence in North Wales and Ambler, both in Montgomery County. When Defendant Dallas’ wife was advised of the reason for the search, she told detectives that their accountant had warned them against using 1099’s to report income.
Act 72 states that it shall be unlawful for an employer, or officer or agent of an employer, to discriminate in any manner or take an adverse action against any person in retaliation for exercising rights protected under the Act.
In March 2022, detectives from the Criminal Investigation Division met with Giangiulio. He told investigators that when he went to pick up his final paycheck from Defendant Dallas, Dallas informed him that Dallas was aware that Giangiulio was speaking with investigators, and he offered Giangiulio $5,000 to “make it go away.” Flavio told investigators that he was advised by Dallas that Dallas was aware that Flavio was speaking with investigators and he had been told by Dallas not to come to work anymore.
By terminating Flavio and offering Giangiulio a payoff, Defendant Dallas was in clear violation of Act 72.
“I want to commend Criminal Investigation Division Detective Edward Rosen and Deputy District Attorney Douglas Rhoads for their efforts in building this case,” said Stollsteimer. “I also want to express my appreciation for the assistance and cooperation of Montgomery County District Attorney Kevin Steele. Finally, I want to thank Assistant Attorney General Elizabeth Schneider of the Attorney General’s Fair Labor Section for her assistance,” said Stollsteimer.
CRIMINAL CHARGES, AND ANY DISCUSSION THEREOF, ARE ALLEGATIONS AND ALL DEFENDANTS ARE PRESUMED INNOCENT UNLESS AND UNTIL PROVEN GUILTY.
The District Attorney and the Criminal Investigations Division remind anyone in Delaware County who observes suspicious activity to call 911 immediately and provide the most specific and accurate details possible to assist law enforcement agencies investigating the call for service.
For more information contact Margie McAboy, Delaware County District Attorney’s Office, 610-579-0429.