Labor supplier pleads guilty to tax evasion in probe of LI building industry

By Robert E. Kessler | robert.kessler@newsday.com
2:18 PM EDT, September 18, 2007

As part of an ongoing federal investigation into both tax evasion and the use of illegal immigrants in the home construction industry, a major supplier of carpenters for home building on Long Island pleaded guilty yesterday to evading federal income taxes by paying his workers in cash.

Gary Woltmann, the president of Woltmann Associates in Port Jefferson, was the second head of a business that supplies skilled carpenters for the framing of housing units to be arrested recently by agents of the Criminal Investigation Division of the Internal Revenue Service as part of the federal probe.

In July, Jay Kuhn, the head of Kuhn Brothers Construction of St. James, pleaded guilty to evading federal income taxes on money paid to carpenters, many of whom were illegal immigrants from Ecuador.

After Woltmann's plea yesterday in federal District Court in Central Islip, an official of the capenter's union, which has been cooperating with the federal investigation, said that many of the carpenters that Woltmann employed were illegal immigrants.

The official, Antonio Martinez, an organizer for the Empire State Regional Council of Carpenters, said some of the illegal immigrants used by Woltman were from Ecuador, but most were Brazilian and who lived in Newark. He said he based his information on job site interviews he had and his union associates had conducted.

Martinez said some workers were getting paid as little as $7 an hour, while union scale is $30 an hour, plus benefits.

But Woltmann's attorney, John Juliano, of East Northport, denied that his client had employed any illegal immigrants. Assistant U.S. Attorney Charles Kelly who is heading the home-building investigation, declined to comment, as did Joseph Foy, a spokesman for the IRS.

Woltmann pleaded guilty to evading $220,000 in federal income taxes on $750,000 he paid to carpenters. In court, federal prosecutor Kelly said that Woltmann paid his workers partly by check and partly in cash, and that the government had seized Woltmann's records, which included a number of large checks that had been converted into cash and then used to pay the workers off-the-books.

Martinez, the carpenter's union official, said "it is an irony" that many of the houses that Woltmann's carpenters worked on were government subsidized and intended for low-income people. So, in effect, taxpayers were getting hit on both ends, having to make up for the money that was not entering the federal treasury because of the tax evasion, and paying for housing subsidies, Martinez said.

But Martinez said that knowledge of the overall federal investigation and Kuhn's arrest in July had created a somewhat different atmosphere in the home building industry on Long Island, and he believed more companies were paying union wages and doing so on-the-books.

Woltmann faces 21 to 27 months in prison under federal sentencing guidelines when he is sentenced by U.S. District Judge Thomas Platt. No sentencing date is set.

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