New York State Office of the Attorney General arrested David Cohen, the owner of seven clothing stores in New York City on various charges including allegedly underpaying his workers, falsifying tax and business records, and impeding the criminal investigation. The Attorney General also sued for over $1.5 million in unpaid wages and damages.
Cohen’s clothing stores are Mystique Boutique, Madness Boutique and Exstaza, seven stores in all. According to the government, Cohen’s employees worked up to eleven hours per day, six days per week but most of them were not paid overtime. State and federal law requires overtime payment after forty hours a week. According to the complaint, Cohen has underpaid 150 workers more than $1.5 million in unpaid wages.
The complaint also alleges that when Cohen first discovered that his businesses were investigated, he pressured his workers not to cooperate with the investigation, even going so far as allegedly offering paying a worker $50,000 for information on workers who were talking to the government.
Another problem from Cohen is that according to the Attorney General, he falsified tax records by underreporting to New York State both the number of employees at his stores and their salaries. This information is used by the state to determine an employer’s liability to the unemployment insurance fund. Misrepresenting payroll in formation is unemployment insurance fraud.
Criminal charges against Cohen include nineteen counts of falsifying business records” in the first degree and nineteen counts of offering a false instrument for filing. Both charges are class E felonies that potentially carry terms of up to four years in prison each. Additional charges are criminal retaliation, tampering with witnesses, failure to pay wages, and multiple Labor Law violations.
