File Photo
Navillus Contracting performed work on Resorts World NYC Casino in South Ozone Park.
By Forum Staff
An 11-count indictment was unsealed Thursday in federal court in Brooklyn charging Donal O’Sullivan, his sister Helen O’Sullivan—both residents of Queens—and Padraig Naughton with wire fraud, mail fraud, embezzlement from employee benefit funds, submission of false remittance reports to union benefit funds and conspiracy to commit those crimes.
The indictment relates to the defendants’ conduct at Navillus Tile, Inc. d/b/a Navillus Contracting (“Navillus”), one of the largest construction firms in New York City. Donal O’Sullivan is the founder, owner and president of Navillus; Helen O’Sullivan is the treasurer of Navillus; and Padraig Naughton is the company’s financial controller. The defendants were arrested Thursday morning and arraigned Thursday afternoon; Donal O’Sullivan was released on a $500,000 bond; Helen O’Sullivan and Naughton were each released on $250,000 bonds.
According to the charges, Navillus is a signatory to multiple collective bargaining agreements with labor
Organizations—including the Bricklayers and Allied Craft Workers Local No. 1, the New York
City District Council of Carpenters, the Cement Masons Union, the Pointers, Cleaners and
Caulkers, and the International Brotherhood of Teamsters Local 282—that required the company to employ union workers on its projects and to make contributions to various union benefits including pension, annuity and welfare funds on their behalf. To ensure that the benefits funds received the contributions that it had agreed to pay, Navillus was required to periodically file remittance reports with the benefits funds that detailed the number of hours worked by each worker.
As alleged in the indictment, the defendants engaged in a payroll scheme from approximately 2011 to 2017 to avoid making those contributions by using a consulting firm to pay certain Navillus workers for work done on Navillus construction jobs. However, neither Navillus nor the consulting firm made contributions to the benefits funds on behalf of those workers. To disguise the scheme, the defendants directed the consulting firm to issue fraudulent invoices to conceal the fact that funds paid by Navillus to the consulting firm were, in fact, for wages paid to Navillus workers. As a result, the defendants caused Navillus to avoid making over $1 million in required contributions to union benefits funds.
“As alleged, these senior construction company executives were the architects of a payroll scheme designed to evade obligatory contributions to union benefits funds that their workers depend upon,” said Acting Brooklyn U.S. Attorney Seth DuCharme.
Federal Bureau of Investigation-New York Assistant Director in Charge Bill Sweeney, Jr. added, “As alleged, the defendants deprived union workers of benefits to which they were entitled, falsifying records and creatively circumventing their fiscal responsibilities. This type of crime depletes the benefits union employees have a right to access. Today’s arrests highlight this illegal scheme and reassert our dedication to rooting out crimes of this nature.”
“The Port Authority Office of Inspector General initiated this investigation, and the message today’s indictment sends is crystal clear: the Port Authority has zero tolerance for fraud by its business partners, and we will work aggressively to ensure that individuals who engage in fraudulent conduct—including contractors’ senior executives, where appropriate—are held personally accountable under the criminal law,” said Port Authority Acting Inspector General Michael Farbiarz.
