Contractor Offers Guilty Plea to Federal Charges in Connection with N.Y. Building Collapse

Roslynn Mauskopf, United States Attorney for the Eastern District of New York, Gordon Heddell, Inspector General, United States Department of Labor, Howard Radzely, Solicitor of Labor, United States Department of Labor, David Williams, Inspector General, United States Postal Service, and Rose Gill Hearn, Commissioner, New York City Department of Investigation, announced that Kang Yeon Lee, a contractor and owner of Big Apple Development and Construction (“Big Apple”), pleaded guilty to causing the death of a worker by failing to comply with Occupational Safety and Health Administration (“OSHA”) regulations requiring contractors to provide fall protection equipment for their employees.

Lee also pleaded guilty to mail fraud in connection with a scheme to conceal his failure to pay his workers the prevailing wage on a federally funded United States Postal Service construction project at John F. Kennedy International Airport. The guilty plea proceeding was held before United States Magistrate Judge Joan Azrack at the U. S. Courthouse in Brooklyn, New York.

These charges arise out of an investigation into a building collapse at 9718 Fort Hamilton Parkway in Brooklyn, on May 20, 2004, that resulted in the death of one of Lee’s employees, Angel Segovia. Big Apple was the general contractor for the project.

Four Big Apple workers were pouring a five foot by 16 foot concrete balcony on the third floor of the structure when the balcony collapsed. Three of the workers fell approximately 35 feet to the courtyard below, while the fourth worker leapt to safety inside the building. One of the workers, Segovia, died from injuries sustained in the fall, and the two others were badly injured.

Big Apple had reportedly not provided any of the four workers with the federally mandated fall prevention equipment. Lee and Big Apple had reportedly received prior OSHA citations in 2001 for failing to provide fall protection equipment for Big Apple’s workers.

The government’s investigation also revealed that in August 2000, Big Apple, then operating as Big Apple Construction and Restoration, was hired by the general contractor at a Postal Service financed construction project at John F. Kennedy Airport to do demolition and foundation work.

As a contractor on a federally funded construction project, Big Apple was required to pay its workers the locally-prevailing wage rate determined by the Department of Labor and to submit certified payroll records showing that the workers had been paid in accordance with the law. Lee reportedly directed his site supervisors to falsely certify on payroll records that Big Apple’s workers were paid at the required wage rate, when, in fact, the workers were paid significantly less. The ultimate submission of those false certifications led to the mailing of payment in satisfaction of Big Apple’s contract.

When sentenced by United States District Judge Frederic Block, Lee faces a maximum of 20 years’ imprisonment under 18 U.S.C. Section 1341 for mail fraud, six months’ imprisonment under 29 U.S.C. Section 666(e) for the death of Segovia, and a maximum fine of $250,000 for each count of conviction.

In addition, pursuant to his plea agreement with the government, Lee has agreed to pay more than $2,000,000 to compensate the victims of his crimes.

Specifically, Lee will pay $1,000,000 to the victims of the balcony collapse, $157,940 in penalties to settle the 12 OSHA citations issued in connection with the balcony collapse, $55,193.80 to settle overtime wage violations with the Department of Labor, Wage and Hour Division, and he will forfeit criminally $96,551.12 for the prevailing wage violation, and forfeit civilly $750,000 to settle his past failure to make contributions to a pension plan on behalf of workers covered by a collective bargaining agreement.