State College contractor charged in multi-million dollar theft

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HARRISBURG, Pa. (WTAJ) — A contractor in State College has been charged with four counts of theft, deemed the largest prevailing wage criminal case on record under state and federal law, according to Attorney General Josh Shapiro.

Shapiro announced the charges against Glenn O. Hawbaker Inc. Thursday. Hawbaker is one of the largest contractors to complete projects on behalf of the commonwealth, receiving an estimated $1.7 billion in funding as of 2021, according to Shapiro. These theft charges are the result of a three-year investigation and stem from violations of the Pennsylvania Prevailing Wage Act and Davis-Bacon Act. Both were enacted to ensure that all contractors working on projects that receive state or federal funding pay the same wage rates determined by state and federal agencies.

“This is the largest prevailing wage criminal case on record — under Pennsylvania prevailing wage law and across the United States under federal law,” Shapiro said. “My focus now is on holding Hawbaker accountable for breaking the law, and getting these workers their money back.”

Shapiro’s office said as a result of Hawbaker’s conduct, individual workers lost tens of thousands of dollars from their retirement. They said Hawbaker used its workers’ fringe benefit funds to lower their costs and thereby increase its own profits.

“The company disguised its scheme by artificially inflating its records of benefit spending by millions of dollars each year and claiming credit for prohibited costs.”

ATTORNEY GENERAL JOSH SHAPIRO

Investigators said they discovered the company stole wages from its workers by using money intended for prevailing wage workers’ retirement funds to contribute to retirement accounts for all Hawbaker employees, including the owners and executives. Workers received less money in their retirement accounts than what was owed, according to investigators.

Shapiro’s office said Hawbaker also stole funds intended for prevailing wage workers’ health and welfare benefits and used them to subsidize the cost of the self-funded health insurance plan that covers all employees.

“The company disguised its scheme by artificially inflating its records of benefit spending by millions of dollars each year and claiming credit for prohibited costs,” Shapiro’s office said. “Those measures created the appearance that it provided employees with benefits that far exceeded the cost of those that it actually did.”

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Investigators said they determined the situation had been going on for decades, but could only charge Hawbaker for the last five years due to the statute of limitations.

A hotline has been set up for workers that believe they may have lost out on benefits. The number is 814-746-3518.

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