Michael Cholowsky and Sky Materials Corp. have been charged in Manhattan with concealing information about payroll and submitting false information about the number of workers employed by the company. The defendants were charged with insurance fraud in the first and second degrees as well as offering a false instrument for filing in the first degree.
According to the indictment and documents filed in court, in 2015, Mr. Cholowsky, the owner of Sky, an excavation subcontractor, received premium reductions by underreporting payroll to the New York State Insurance Fund (“NYSIF”), a workers' compensation carrier, in two separate filings pertaining to two distinct policy periods.
Prosecutors said that, for the period between April 2013 and April 2014, Mr. Cholowsky and Sky concealed more than $650,000 in payroll, resulting in a premium reduction of more than $100,000. For the period between April 2014 and April 2015, Mr. Cholowsky and Sky concealed more than $3 million in payroll, resulting in a premium reduction of well over $1 million, according to the charges.
The defendants allegedly concealed the funds by processing payroll through a check casher and paying employees through the company's operating bank account.
In addition, Mr. Cholowsky was charged with submitting false documents regarding the company's registration and employees to the BIC. In two different applications, according to prosecutors, Mr. Cholowsky claimed that Sky employed fewer than 20 workers when, in fact, it employed at least 50 individuals between 2012 and 2014, and employed more than 150 individuals between 2014 and 2015.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].