Former Owner of Cleaning Company Charged with Workers’ Comp Fraud

July 14, 2020

The former owner of a Massachusetts cleaning company has been charged with wage theft and workers’ compensation insurance fraud, Rhode Island Attorney General Peter F. Neronha announced.

Marcello Pompa, of Saugus, Mass., is the former owner of M&M Cleaning of MA LLC. He has been charged with wage theft, failing to maintain workers’ compensation insurance coverage, and workers’ compensation insurance premium fraud stemming from his actions as the contractor for cleaning services at the Community College of Rhode Island (CCRI) between 2017 and 2019.

The 18-count criminal information, filed in Providence County Superior Court on April 30, alleges that Pompa failed to pay approximately $10,885 in wages to 16 former employees before the company went out of business on March 14, 2019.

Between 2017 and 2019, M&M Cleaning provided cleaning services to CCRI at its Lincoln, Providence, and Warwick campuses and employed approximately 25 individuals.

“Wage theft is a persistent problem in Rhode Island and addressing it has been one of my top priorities,” Neronha said in a press release issued by his office. “When employers cheat their employees out of hard-earned wages, they are not only harming those employees and their families, but also gaining an unfair advantage over businesses that are playing by the rules.”

To date, 16 former employees have reported that Pompa failed to pay them wages from approximately March 4, 2019 to March 15, 2019. The criminal information alleges that employees noticed irregularities on their paystubs, were paid on different days, and at times, were paid by personal checks from Pompa as opposed to the business.

Pompa is also charged with one count of failing to maintain workers’ compensation insurance coverage for his employees from December 1, 2017, to September 22, 2018, and one count of fraud based on falsely reporting payroll information to his workers’ compensation insurance company.

Pompa falsely reported in 2018 that M&M Cleaning had an estimated annual payroll of $10,000 when state tax records showed that the company reported approximately $388,311 in wages over the previous year.

By falsely reporting a lower annual payroll, Pompa was able to obtain a lower workers’ compensation insurance premium from his insurance provider, thereby lowering his business operating expenses. In executing this illegal scheme that kept business expenses artificially low, Pompa sought to gain a competitive advantage while bidding for cleaning contracts, like the one at CCRI, according to the release.

Pompa was previously convicted of workers compensation insurance fraud and larceny in Massachusetts on October 7, 2019, and sentenced to one year in jail with six months to serve. Those charges stemmed from the operations of M&M Cleaning Inc. in Massachusetts.

Pompa is scheduled to be arraigned in Providence County Superior Court on July 17, 2020.

The case was investigated by the Attorney General’s BCI Investigation Unit and the Department of Labor and Training. It is being prosecuted by Special Assistant Attorney General Carole McLaughlin. A criminal complaint is merely an accusation, and a defendant is presumed innocent unless and until proven guilty.

Source: Rhode Island Office of the Attorney General

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