California Attorney General Rob Bonta filed 31 felony charges of wage theft and tax evasion against a construction company that he said cost the state and the company’s workers $2.6 million, he announced today.
Bonta filed the criminal complaint on Aug. 26 alleging that US Framing West dodged more than $2.5 million in state payroll taxes and underpaid workers on a public housing project in Cathedral City, in Riverside County. The company, which builds wood framing for such projects as hotels, apartments and housing developments, shorted workers at least $40,000 when it failed to pay the prevailing wage, Bonta said.
“For some reason US Framing West seems to think it can operate outside the prevailing wage laws of California,” Bonta said in a press conference in Los Angeles today. “I’m here with a simple message: They cannot. No company can.”
Cal Matters contacted officials with US Framing West named on its website but did not receive a response.
Bonta charged the company and two of its officials, Thomas Gregory English and Amelia Frazier Krebs, with wage and tax violations in Riverside, San Diego, Los Angeles, Orange, Alameda, Santa Clara, San Francisco and Contra Costa counties.
Political observers expect Bonta to announce a run for governor, so publicizing a high-profile labor case may help him build support from unions. Most wage theft cases brought by the state are handled administratively or in civil court.
Between 2018 and 2022, US Framing West hired unlicensed subcontractors and underreported its payroll to the state Employment Development Department, Bonta said. He accused the company of grand theft, payroll tax evasion, prevailing wage theft, and filing false documents with the state.
US Framing West also skipped personal income tax withholding and premiums for state unemployment and disability insurance, Bonta said, and it filed false payroll records for workers on Veterans Village, the Cathedral City project. The facility opened in 2022, offering 60 housing units and services for veterans.
The complaint says the company stole wages from 19 workers in Riverside County in 2021 and 2022. Under California’s penal code, employers can face grand theft charges for stealing more than $950 in wages or tips from one employee or a total of $2,350 from two or more employees within a year.
The Northern California Carpenters Regional Council tipped off the state Department of Justice to potential wage theft violations at an Oakland construction project in 2019, Bonta said. The department subsequently looked into US Framing West’s other projects across the state.
The office filed charges in August, and the two named defendants surrendered and were arraigned this month.
Subsidizing crime
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California’s prevailing wage requirements apply to most projects built with public funding, said Matthew Miller, senior field representative for labor compliance for Nor Cal Carpenters Union. He said US Framing West was working on at least four housing projects financed with tax credits.
“California taxpayers are subsidizing criminal activity in the affordable housing industry,” Miller said.
He added that developers should avoid doing business with companies that skirt employment and tax laws.
Wage theft can take various forms — employers don’t pay employees for all hours worked, don’t pay the minimum wage, skip overtime pay or don’t allow legally required breaks. In California, workers lose about $2 billion a year to wage theft, Bonta’s office said, and workers in low-wage industries are the most affected. In 2020 and 2021, workers filed claims for more than $300 million in stolen wages each year.
Lorena Gonzalez, president of the California Labor Federation, called wage theft “the number one crime” in the burglary and theft category and said businesses should not be able to pay their way out of wage theft violations.
