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Homebuilder gets 2 years probation for wage violations

By: Dan Shaw, [email protected]//October 1, 2015//

Homebuilder gets 2 years probation for wage violations

By: Dan Shaw, [email protected]//October 1, 2015//

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A federal judge has sentenced a New Berlin homebuilder to two years of probation for failing to ensure that construction workers employed on a Milwaukee housing project received federally mandated prevailing wages.

U.S. District Court Judge J.P. Stadtmueller handed down that punishment Thursday to Scott Watry, the owner of Watry Homes LLC. Watry could not be immediately reached.

The criminal case against him stems from the roughly $4.7 million worth of work that Watry’s company performed in 2011 and 2012 on the Westlawn Gardens housing project on Milwaukee’s northwest side.

Watry and his associates were suspected of paying workers considerably less than the compensation mandated by the Davis-Bacon Act, which requires that prevailing wages be part of any project that receives federal money.

On the Westlawn project, the prevailing wage for carpentry and siding work was $45 an hour, while that for roofing was $42.50 an hour. A plea agreement Watry reached in June alleged that his company instead paid various workers on the Westlawn project between $14 and $35 an hour.

Of the two years Watry will have to spend on probation, six months will be on house arrest. He also will have to pay $659,000 in restitution to the workers who did not receive prevailing wages.

That amount comes on top of the $1 million he has already agreed to pay to resolve a separate, whistleblower lawsuit that eventually led to the filing of the criminal charges against him.

The whistleblower in the case, Heather Ramos, has received $180,000 from that $1 million settlement. Ramos’ lawyer, Nola Hitchcock Cross, said she was disappointed that Watry’s only punishment in the criminal case was probation and house arrest.

She noted that the prosecutors in the case had asked that Watry spend a year and a day in prison.

“We find that that is the best deterrent for repetitive fraud,” she said.

Despite the settlement of the civil lawsuit, legal wrangling continues over whether Watry should have to cover attorney’s fees stemming from the case. Also unresolved are accusations that he retaliated against Ramos for starting the inquiry into his wage violations.

According to the federal plea agreement reached in June, Watry was told by a general contractor that he would have a hard time winning work on the Westlawn project without finding a way to lower his original bid amount by $500,000. Watry and his associates, according to the document, decided the best way to hit that target would be to pay workers less than required by prevailing wage laws.

According to a U.S. Department of Justice news release from June, Watry’s underpayments were concealed in at least two ways. Watry and his associates, at times, would record fewer hours than were actually worked, a sleight of hand that helped conceal the fact that the higher rates required by federal law were not in fact paid.

The conspirators, according to the release, would also report the names of employees who were not working on the project. That maneuver likewise helped conceal the fact that the real workers on the project were being underpaid.

The U.S. Department of Labor began investigating Watry in January 2012. The FBI obtained a warrant on Oct. 15, 2013, to search Watry’s offices and conducted a raid later the same month.

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