Suffolk construction company, owner plead guilty to insurance fraud, larceny

The owner of a Suffolk County construction company pleaded guilty Wednesday to insurance fraud and larceny charges for committing more than a quarter of a million dollars in workers’ compensation fraud in a plea deal that requires the defendants repay the stolen funds, authorities said.

DME Construction Associates, Inc. and its owner, Peter Chardon, of Setauket, “knowingly underreported” its payroll to State Farm Fire and Casualty Company, which resulted in the company underpaying premiums to the tune of $231,576 between February 2017 and May 2021, according to the State Offices of the Inspector General and the Suffolk District Attorney’s Office, which jointly investigated the matter.

The company and its owner had said its roofing workers were doing “painting and decorating,” which mandates less expensive workers’ compensation insurance because it is considered less risky work, authorities said.

But investigators said DME’s contracts for shopping mall buildings and a new building at Southampton Hospital were for roofing.

DME also knowingly underreported its payroll to the New York State Insurance Fund, NYSIF, which resulted in an underpayment of premiums in the amount of $65,875.13, authorities said.

The defense attorney for Chardon and DME did not immediately respond to a message seeking comment.

“Worker’s compensation insurance is designed to protect the health of our workers within a framework that will not bankrupt the New York State Insurance Fund,” Suffolk County District Attorney Ray Tierney said in a statement. “By deliberately lying to save themselves money, these defendants endangered workers and increased construction costs for those who play by the rules by refusing to pay their fair share to keep workers safe."

Workers' Compensation Fraud Inspector General Lucy Lang said in a statement: “The misclassification of employees creates an unfair playing field, puts all workers at risk and drives up the cost of coverage for everyone. My office is steadfastly committed to protecting New York’s workers, our economy, and the integrity of the insurance system."

Chardon pleaded guilty in Suffolk County Supreme Court to petit larceny and fifth-degree insurance fraud.  His company, DME, pleaded guilty to second-degree grand larceny and second-degree insurance fraud.

As part of the plea agreement, Chardon and DME have agreed to pay $65,875.13 representing the amount of funds stolen from NYSIF, and a payment of $231,576.00 representing the amount of funds stolen from the State Farm Fire and Casualty Company.

By Nicole Fuller

nicole.fuller@newsday.com@NicoleFuller

Nicole Fuller is Newsday's senior criminal justice reporter. She began working at Newsday in 2012 and previously covered local government.