Federal investigators have launched a probe into post-Sandy contract work performed by Looks Great Services Inc., a Huntington company already under scrutiny by the state attorney general and the Nassau County district attorney.
The new investigation is by the U.S. Department of Labor's Wage and Hour Division. It enforces prevailing wage requirements of federal labor laws and other laws that apply to federal contracts for construction and provision of goods and services.
"The U.S. Department of Labor's Wage and Hour Division confirms that there is an open investigation against Looks Great Services Inc.," spokeswoman Sonia Melendez said last week. She declined to comment further, saying the case is "an open law enforcement investigation."
Since Sandy, millions of dollars in federal money have flowed to Long Island and other storm-affected areas of the Northeast for cleanup and repair work. Nassau has paid Looks Great about $35 million of $68.8 million that the county legislature approved for the company's Sandy cleanup work, county Comptroller George Maragos has said.
Newsday has reported that Looks Great Services is among companies subpoenaed by the Nassau district attorney's office, which is examining how the county entered into agreements for post-Sandy cleanup work, as well as oversight and controls for the work.
The company is also under scrutiny by New York State Attorney General Eric Schneiderman, Newsday has reported. The state is looking into how cleanup contract work was obtained and performance of companies that did the work, according to a source familiar with that investigation. The federal probe of Looks Great is now the fourth opened in the six months since Sandy hit into how Long Island governments hired contractors.
The federal labor department probe centers on New York City-based Sandy cleanup contracts awarded by the Army Corps of Engineers, a source said. Federal records show Looks Great Services was awarded two Army Corps contracts in February: $1,171,605 for tree stump removal, cutting and transportation services; and a $631,506 contract for wood chipping work at Floyd Bennett Field in Brooklyn.
Responding to the labor department probe, Looks Great Services spokeswoman Risa Heller said Friday that the company sought to involve the department a week earlier when it learned one of its subcontractors' subcontractors -- known as "low-tier contractors" -- had not paid its employees.
"We were made aware one week ago that one of our lower tier subcontractors had not paid their employees," Heller said in a written statement. "We immediately took actions resulting in payment to this subcontractors' employees, and are working to ensure this company and any others involved are held accountable for their actions. We requested USDOL be involved to ensure the situation was fully addressed."
Heller declined to name the subcontractor involved because of the investigation. The labor department has declined to say when its investigation of Looks Great Services began.
Irv Miljoner, Long Island district director for the Labor Department's wage and hour division, said under federal labor laws that apply to government contracts, a prime contractor is responsible for the proper payment of wages and benefits to all employees who perform the work, including those of subcontractors. "They are responsible for the proper payment of wages and benefits to every worker performing work under their contract," Miljoner said.
Ken Wells, a spokesman for the Army Corps of Engineers, said Looks Great was chosen after a competitive bidding process. He also declined to comment on the labor department investigation. Heller said the company also carried out two competitively bid Army Corps purchase orders for tree removal in the city after Sandy.
Public records show Looks Great founder Kristian Agoglia, 38, grew up on Long Island and started out in business at age 17, operating out of his parents' garage in Huntington in 1990. Originally called T&K Landscaping, it was incorporated by Agoglia in Delaware in 1999 as Looks Great Services Inc.
Heller said the company has worked on dozens of disaster-related projects, as both the prime federal contractor or as a subcontractor on federally funded contracts for agencies and local governments across the country. "We are very proud of the work we have done in these situations, helping communities get back on their feet after a natural disaster," she said. "Our work includes tornadoes, ice storms, hurricanes and other complex disaster-related situations."
The company worked in Lakeland, Fla., following Hurricane Jeanne in 2004 and in Orlando following hurricanes Frances and Charlie the same year. In the aftermath of Hurricane Katrina in 2005, Looks Great Services did work in Miami, New Orleans and the lower counties of Mississippi, according to the company's website.
Miljoner said that more Sandy-related federally funded projects are expected. He said the department has moved to assign investigators and would continue to devote resources to ensure there is compliance with federal labor laws.
"We are already involved in enforcement actions in relation to work that has occurred to date and will be proactive in ensuring compliance with projects yet to come," he said.
With Joe Ryan