Owner Sentenced, Fined $1.2M for Workers’ Comp Scheme Uncovered After Tragedy

A large-scale workers’ compensation fraud and tax evasion scheme that came to light when an employee was killed while removing a sign from a brewery has resulted in the sentencing of a construction firm owner.

According to New York State Inspector General Lucy Lang, Quirino Rotondo, owner of Metro Industrial Wrecking & Environmental Construction in Dix Hills, was recently sentenced to a year in prison and two years of supervised release and ordered to pay $1.2 million in restitution for his role in the scheme.

Rotondo’s sentencing came following a joint investigation by the Inspector General, Internal Revenue Service and Federal Bureau of Investigation (FBI). Specifically, Rotondo was ordered to pay $174,070 to the New York State Insurance Fund; $546,562 to the IRS; and $515,173 to Continental Insurance.

The joint investigation revealed that as a way to obtain lower premiums, Rotondo falsely classified high-risk demolition workers as low-risk employees and claimed they were performing clerical, carpentry, or painting work when applying for workers’ compensation insurance. Rotondo also insured his workers under a network of unrelated companies, effectively shielding his own business from liability while placing workers at risk.

Federal prosecutors said the scheme had serious consequences. In 2018, William Villatoro of Bay Shore, a 44-year-old worker for one of Rotondo’s companies, died from injuries suffered while using a gas-powered demolition saw to remove signage at a defunct MillerCoors plant in North Carolina.

When Villatoro’s estate sought damages, Continental Insurance and the New York State Insurance Fund uncovered that Rotondo’s employees, including the victim, had not been properly listed under the company’s insurance — leading to denied claims, delayed treatment, and postponed death benefits.

The investigation also found that Rotondo failed to file individual or corporate tax returns from 2016 to 2019, despite earning more than $2.6 million in taxable income.

Topics Workers' Compensation