A former sprinkler contractor cut a deal in an Orange County courtroom that had him pleading guilty to winning a lucrative bid to install improvements at the Fairview Developmental Hospital in Costa Mesa, paying his employees the state contracted amount and then forcing the workers to give him back $81,000 lest they lose their jobs.
Sourin Babayan, who also had the nerve to try to get his workers to keep quiet about the scheme, was immediately sentenced Friday to two years in state prison and ordered to pay $80,200 in restitution.
DJM Construction, the general contractor who was awarded the state project, sub-contracted Babayan's SDB Construction for the sprinkler work in Costa Mesa. Cost of the SDB job: $820,000.
Babayan, 65, supervised 17 employees and was solely responsible for managing the payroll to complete the job. But between Feb. 15-June 22, 2013, he submitted phony certified payroll records for labor to DJM and received a lump sum for payroll. Babayan did issue payroll checks for the correct amounts to ensure proper bookkeeping, but he had his employees under threat of termination return some of their wages back to him and kept that money for his own personal use.
His demise came after DJM let SDB go because Babayan submitted a new, much-higher estimate to complete the job. The SDB employees were informed they were out of work on July 8, 2013. By then, the Orange County District Attorney's office (OCDA) had been informed by a worker of Babayan's shady payroll system and the agency had launched an investigation with the state Department of Industrial Relations' Division of Labor Standards Enforcement.
But the crimes didn't stop with the probe. On July 12, 2013, Babayan invited all his employees to his Glendale house under the guise of giving them their last paychecks. He then dissuaded them from being witnesses in the case against him.
He never did give the workers their final checks, so you can now see how well that plea to remain silent went. He copped Friday to 17 felony counts of taking and receiving a portion of a worker's wage on public works project and six felony counts of dissuading a witness from prosecuting a crime.
"This case is another example of the serious nature of wage theft and our commitment to ensuring maximum civil and criminal penalties to put an end to it," says Labor Commissioner Julie A. Su in an OCDA statement. "Employers in the underground economy who have concluded that it is cheaper to break the law, the chances of getting caught are slim, and the penalties when you do get caught are minimal should know that those days are over."