Former business owners indicted
POTSDAM — Three former owners of a bankrupt construction company have been indicted on federal charges that they stole money intended for their employees' retirement plan in 2003.
Sidney Belile, Raymondville, Mark Mayette, Waddington, and Kirk Mayette, Madrid, owners of Northern New York Environmental Services Corp. Inc., which did business as Northern New York Construction Services Corp., each face four charges in an indictment handed up Oct. 30 in U.S. District Court.
The businessmen pleaded not guilty Nov. 12 to charges of mail fraud, conspiracy to commit mail fraud, filing a false statement and theft or embezzlement from an employee benefit plan. They have been released on their own recognizance, with a trial scheduled for Jan. 12 in federal court.
Mr. Belile was the company's president, while the Mayettes were both vice presidents. Each owned a one-third share of the company, according to court documents.
It is alleged that in January 2003, the company entered into an agreement with Beneco Inc. to administer a defined contribution plan for its employees. Under terms of the plan, the company was obligated to contribute money from construction contracts into the retirement fund on behalf of employees enrolled in the plan.
According to court documents, the company worked as subcontractor on various contracts between state and local governmental agencies and primary contractors. Employees working on the contracts had to be paid prevailing wage as required by federal and state laws. The statutes contain a component that allows fringe benefits, such as contributions toward a retirement plan, to be included in the prevailing wage requirement.
The company's owners chose to meet the prevailing wage requirement by making employer contributions to the defined contribution plan on behalf of employees. Employees enrolled in the plan also were 100 percent vested in the benefit payments made on their behalf by Northern New York Construction Services Corp.
It is alleged that the company's owners did not make contributions to the fund for most of 2003, instead keeping the money for their own use. It also is claimed the company submitted false certifications to government agencies showing the benefits were being paid to employees when they were not, inducing these agencies and their prime contractors to continue making payments to the company.
The owners are charged with mail fraud because at least one of the alleged false payroll certifications was mailed Nov. 3, 2003, to the Malone Central School District for work performed at Franklin Academy Senior High School.
According to documents filed in U.S. Bankruptcy Court, Northern New York Environmental Services filed for bankruptcy in August 2003. The case was closed in April 2005.
Michael J. Vavonese, Syracuse, an attorney representing Kirk Mayette, said the owners are respected businessmen and strong family men who have pleaded not guilty to the allegations.
"It's tough economic times," he said. "Trying to keep a business afloat is a difficult situation."
He declined further comment on the matter. Attorneys for Mark Mayette and Mr. Belile were unavailable for comment Tuesday.
