Joint Investigation Between New York State Department of Labor and Department of Labor Yields Guilty Plea in Underpayment of Wages

Friday, May 3, 2013
The Labor Unit in Nassau County has secured a top-count guilty plea from two cousins who own an East Meadow diner for failing to pay 72 employees more than $500,000 in wages.

The plea is the result of a joint investigation between the DA’s Office’s Labor Unit, the United States Department of Labor, Wage & Hour Division, and the New York State Department of Labor, Unemployment Insurance Division (NYSDOL).

George Strifas, 46, of East Hills, Thomas Strifas, 41, of Merrick, and their company, Stardust Diners, Inc., pleaded guilty to felony counts of Offering a False Instrument for Filing in the First Degree and Falsifying Business Records in the First Degree, and one misdemeanor count of Failing to Pay Wages in Accordance With the New York State Labor Law. George and Thomas Strifas face up to four years in prison at their July 17 sentencing.

As a condition of the plea, the diner owners agreed to pay underpaid minimum wage and overtime of $337,780 and liquidated damages of $163,742 to 72 employees, as well as $48,681 in unemployment insurance to the NYSDOL.

Rice said that the Labor Unit’s investigation into the Colony Diner in East Meadow began when the office was contacted by the USDOL in March 2011. The USDOL had begun a wage investigation into the diner in late 2010. It was revealed through employee interviews that between January 2009 and November 2011, the diner’s wait staff was being paid about $2 or less an hour, the bussing staff was being paid off-the-book from the wait staff’s cash tips, and that kitchen staff was not being paid overtime despite working 50 to 60 hours per week.

State and federal law at the time of the violations mandated minimum wages of $4.65 for wait staff, $7.25 for bussing and kitchen staff, and $10.875 per overtime hour worked.

The investigation also revealed that Colony was paying the majority of its employees off the books, resulting in underpayments of its Unemployment Insurance obligations to New York State. A search warrant executed at the diner in November 2011 revealed falsified payroll and time records and a second set of books with the true pay rate and hours worked by the diner’s employees. Records indicated that the diner claimed on tax returns that only between 11 and 15 people worked at the diner. In reality, they employed between 35 and 40 people in any given week.
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