Long Island contractor gets prison time after worker's death exposes fraud, tax scheme

The owner of a Long Island construction firm was sentenced to 12 months in prison and ordered to pay $1.2 million in restitution following a government investigation into insurance fraud and tax evasion — a case that began after a worker’s fatal accident in 2018.

Quirino Rotondo, owner of Metro Industrial Wrecking and Environmental Corp., pleaded guilty Thursday to eight counts of felony tax evasion. He will serve one year in prison followed by two years of supervised release, according to the sentence handed down in federal court in Central Islip.

Investigators found that Rotondo, of Dix Hills, misclassified demolition workers as lower-risk employees — such as carpenters or painters — when applying for workers’ compensation insurance, according to the New York State Inspector General’s office. The office said Rotondo also insured his employees through unrelated companies to shield his business from liability risk.

“Employers have a legal duty and a moral imperative to protect workers, especially when their jobs put their lives on the line,” New York State Inspector General Lucy Lang said in a statement. “Let the outcome of this tragedy serve as a stark reminder that New York does not tolerate employers who prioritize profit over human life.”

Federal prosecutors said the alleged fraud had serious consequences. In 2018, a 44-year-old worker for one of Rotondo’s companies, William Villatoro of Bay Shore, died from injuries suffered while using a gas-powered demolition saw to remove signage at a defunct MillerCoors brewery in Eden, North Carolina.

When Villatoro’s estate sought damages, Continental Insurance Company and the New York State Insurance Fund were responsible for paying claims, then-Interim U.S. Attorney John J. Durham wrote in a sentencing letter filed in federal court in April. He argued that those insurers assumed that risk based on Rotondo’s fraudulent statements about the nature of his employees’ work.

“Rotondo’s conduct is independently noteworthy for the disregard it displayed toward the laborers who worked for Metro Industrial under extremely dangerous circumstances,” Durham wrote.

The investigation, which also involved the IRS and FBI, found Rotondo failed to file individual or corporate tax returns from 2016 to 2019, despite earning more than $2.6 million in taxable income.

Of the $1.2 million in restitution, Rotondo must pay about $547,000 to the IRS, $515,000 to Continental Insurance and $174,000 to the New York State Insurance Fund.

"Mr. Rotondo's bad decisions should not overshadow his many good qualities as a hardworking business owner and a devoted family man," his attorney Anthony La Pinta said. "He will pay back every penny owed and reimburse the insurance carrier and the workers' compensation fund for all premiums and benefits paid as a result of the tragic death of his loyal and devoted worker William Villatoro."

Metro Industrial is the latest example of a business involved in workers' compensation insurance fraud on Long Island.

Last year, a Garden City contractor was charged with underreporting how many workers it employed to save $235,000 in insurance premiums. In 2022, a business owner in Setauket pleaded guilty to insurance fraud and larceny after misclassifying his company's roofers as painters and decorators, resulting in about $232,000 in underpayments. 

The state Workers' Compensation Fraud Inspector General said in April that its investigations last year identified $2.7 million in fraudulent schemes and led to 14 arrests. Workers' comp fraud can involve employers, individuals who make unwarranted claims or medical providers receiving payments. The role of the state workers' compensation system is to provide cash benefits or medical care to workers injured on the job.

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.