A Rockville Centre man was sentenced for an insurance fraud scheme in which his Queens-based iron and erection construction company underpaid more than $600,000 in workers’ compensation premiums, according to Nassau County District Attorney Anne T. Donnelly.
Mahendranauth Khargie, 36, and his company, GC Stud Inc., pleaded guilty on Oct. 21 before Judge Robert Schwartz to felony insurance fraud. GC Stud also pleaded guilty to felony effect of failure to secure compensation under the New York Workers’ Compensation Law.
On Dec. 2, Khargie received a conditional discharge and made a $625,000 restitution payment to the New York State Insurance Fund. Had he failed to pay in full, he faced a potential prison term of two to six years.
“This company underreported millions of dollars of payroll, allowing them to dodge $600,000 in insurance premiums that every other honest employer has to pay,” Donnelly said. “This sentence holds the defendant and his company accountable… These kinds of schemes hurt workers and undercut businesses that follow the rules.”
NYSIF Executive Director and CEO Gaurav Vasisht said the restitution “should serve as a deterrent to any business attempting to cheat the workers’ compensation system.”
Prosecutors said NYSIF auditors discovered that GC Stud underreported more than $3.5 million in payroll during three policy periods between April 2019 and March 2022. Investigators found undisclosed payments from three steel and iron fabrication companies deposited into a JPMorganChase account that Khargie withheld from auditors.
Khargie was arrested on Sept. 4 in Mineola by members of the DA’s Detective Squad.
The case was prosecuted by Richard Balletta, attorney in charge of labor, and Senior Assistant District Attorney Taylor Cain of the Major Financial Frauds Bureau, under the supervision of Bureau Chief Maureen McCormack and Executive Assistant District Attorney Rick Whelan.
Khargie and GC Stud, Inc. were represented by attorney Joseph Nohavicka.
