State College contractor pleads no contest to wage theft, ordered to pay $20 million in restitution 

A State College-based contractor embroiled in one of the largest prevailing wage criminal cases on record, plead no contest to theft and will be paying over $20 million in stolen wages to over a thousand Pennsylvania workers.

Attorney General Josh Shapiro announced that Glenn O. Hawbaker, Inc., one of the largest contractors to complete projects for the state, plead to four felony counts of stealing wages from workers.

From 2003 through 2018, Hawbaker received an estimated $1.7 billion in contracts from the state, Shapiro’s office wrote in a press release.

The contractor admitted in the plea that during those years it took money intended for prevailing wage workers’ retirement funds to contribute to retirement accounts for all Hawbaker employees.

Hawbaker was also charged with stealing funds intended for prevailing wage workers’ health and welfare benefits, using those funds to subsidize the cost of its self-funded health insurance plan for all employees.

The charges were announced in April and came after a three-year investigation into the company’s practices. Investigators said the company disguised the theft for decades by inflating its benefit spending records.

In a written statement to the Central Penn Business Journal, Hawbaker said that it believes it followed all requirements regarding fringe benefits and that the practices challenged by the Office of Attorney General were based on advice provided by the company’s former attorneys.

“Hawbaker has always intended to properly pay all of its employees. Through the years, both state and federal regulators extensively reviewed our Prevailing Wage Act and Davis Bacon Act practices on jobs and did not find any wrongdoing,” the company wrote. “This led us to believe we were properly following all laws, and we did not plead guilty. We fully cooperated in this process and proactively addressed concerns raised by the attorney general’s office. As stated by the attorney general, we are making past and present employees whole.

Hawbaker pleaded no contest to four felony counts of Theft by Failure to Make Required Disposition of Funds Received. The company was sentenced to five years’ probation and the payment of more than $20 million in restitution to 1,267 affected workers.

As a condition of its probation, Hawbaker will pay for a corporate monitor to oversee its compliance with all state and federal prevailing wage laws and regulations.

“A month ago I met with some of the men and women who had their wages and retirements stolen by Hawbaker — and I told them that we will do everything we can to get them every cent they are owed under the law,” said Shapiro when he announced the plea. “A few minutes ago, I was able to tell them that we made good on that promise.

“We took on one of the largest construction companies in the state, and now 1,267 people will have a better shot at retirement; they will get the paychecks they earned under the law; and they will have their work and their livelihoods protected and respected, instead of ignored.”

Shapiro added that his office has heard from other contractors in the state that this enforcement helps their business by deterring other employers from engaging in similar schemes.

AG Shapiro Announces $48 Billion Opioid Epidemic Deal with Five Companies

Attorney General Josh Shapiro announced on Oct. 21 that he and Attorneys General Josh Stein (NC), Herbert Slatery (TN), and Ken Paxton (TX) secured a $48 billion agreement in principle with pharmaceutical companies Cardinal Health, McKesson, AmerisourceBergen, Johnson & Johnson, and Teva for their roles in fueling the opioid epidemic, according to Shapiro’s office.

The framework agreed upon includes having the companies pay $22.25 billion in cash and $26 billion in medication-assisted treatment drug provision and distribution to each of the four states over 10 years. In addition, the three major distributors have also agreed to change their policies to prevent over-distribution in the future.

“The opioid, heroin and fentanyl epidemic claims the lives of 12 Pennsylvanians per day, and this public health and public safety crisis was engineered by opioid manufacturers and distributors,” said Shapiro. “Today’s agreement holds three of those distributors and two manufacturers accountable for their roles in perpetuating this epidemic.”

The agreement announced today is an agreement in principle. Each state and its local governments will receive a share of the $22.25 billion in cash to take action to abate the crisis, including providing addiction treatment, community paramedic services, and telehealth treatment, among other activities. The formula for distributing this cash is being finalized.

This agreement is the result of an investigation led by Shapiro with 40 other Attorneys General into six manufacturers and three distributors for their roles in the opioid epidemic.