New York Times
Patrick McGeehan
The owner of seven budget clothing stores in Lower Manhattan was arrested on charges of underpaying his workers and falsifying business records, Attorney General Andrew M. Cuomo said.
David Cohen, who owns three Mystique Boutique stores and four other stores on Broadway, Fifth Avenue and Canal Street, paid some of his workers less than $5 an hour, refused to pay overtime, and threatened and retaliated against them for reporting the violations to state officials, according to complaints filed on Tuesday.
Mr. Cohen was charged with 19 counts of falsifying business records and numerous other felonies and violations of labor laws. Mr. Cuomo’s office said it would try to recover $1.5 million in unpaid wages for more than 150 workers and other civil damages.
“In this case, workers were not only ripped off but were also intimidated to make sure they stayed quiet,” Mr. Cuomo said in a statement.
According to the complaints, Mr. Cohen’s employees often worked as many as 11 hours a day, six days a week; most were not paid overtime. Mr. Cohen paid some workers in cash and did not report their employment or wages on his tax forms, the complaints contend. In falsifying those records, Mr. Cohen cheated the state unemployment insurance fund and increased the payroll tax burden on other employers, the complaints contend.
When he became aware of the investigation into his businesses, Mr. Cohen offered to pay an employee for information about which of his co-workers were cooperating with investigators, Mr. Cuomo’s office said.
One complaint quotes Mr. Cohen telling an employee: “What do you want from me? $10,000? $20,000? $50,000? Call the union and find out who’s going to them. I have to speak to the Labor Department on Thursday. Bring me information by Wednesday or don’t come back.”
Laura A. Brevetti, a lawyer for Mr. Cohen, said that he had cooperated fully with the investigation. “We are disappointed that the attorney general has made the decision nevertheless to prosecute,” Ms. Brevetti said. “David Cohen intends to defend these charges vigorously.”
Mr. Cohen, who lives in Nassau County, also owns Madness Boutique on Canal Street, and Exstaza and Amsterdam on Broadway, according to the complaints.