A.G. Schneiderman Announces Arrest of Manhattan Restaurateur for Shortchanging Workers by at Least $100,000

NEW YORK, Oct. 2 -- New York Attorney General issued the following news release:

Attorney General Eric T. Schneiderman today announced the arrest and arraignment of Paul D. Hurley and Portmarnock Restaurant Corp., d/b/a Desmond's Steakhouse & Grill, for failing to pay wages to workers who were hired at various stages during the opening of the 7th Avenue restaurant.

Hurley and the corporation each face a felony count of Scheme to Defraud, among other criminal charges, for failing to pay proper wages to workers -shortchanging 54 workers by more than $100,000 -- and for falsely promising them that they would be paid in the future to induce them to continue working without wages. In addition, the defendants face charges stemming from filing a false application for Workers' Compensation Insurance.

If convicted, Hurley faces up to 4 years in prison.

"The most basic right of an employee is the right to be paid for work," Attorney General Schneiderman said. "Failure to pay legal wages is a crime and when the facts warrant it, my office will vigorously prosecute those who are guilty of breaking the law."

Hurley, 48, of New Rochelle, is the sole owner of Desmond's Steakhouse and Grill located at 515 7th Avenue. Employees were hired from October 2012 through February 2013 to prepare the restaurant for opening on February 25, 2013. The restaurant opened, and employees worked for weeks without pay. By the beginning of April 2013, the employees, including managers, chefs, administrative staff, and servers, were owed more than $100,000. During this time, Hurley promised his employees that he would pay them and asked them to stay on without pay. Many of his employees stopped working in April.

The defendant was charged with one count of Scheme to Defraud in the First Degree, a class E felony, two counts of Violations of the Workers' Compensation Law, class E felonies, and seven counts of Failure to Pay Wages in Accordance with the Labor Law, an unclassified misdemeanor. Hurley faces a maximum sentence of 1 1/3 to 4 years in prison.

New York State's minimum wage is $7.25 an hour. After 40 hours worked, employees are entitled to overtime at one and a half times their rate of pay. It is illegal for employers to retaliate against employees for reporting violations of labor law.

According to the criminal complaint filed today, at least seven former employees are owed about $50,000, including a general manager, who is owed $31,157 for work from October to April; a former server, who is owed $1,744 for a month's worth of work, and a kitchen worker, who is owned $5,800 for two and a half months of work. At the beginning of April 2013, Desmond's Steakhouse & Grill had approximately 54 employees who were owed a total of at least $100,000.

The charges are accusations, and the defendant is presumed innocent unless and until proven guilty.

The investigation was conducted by Investigators Edward Ortiz and Supervising Investigator Luis Carter, under the supervision of Deputy Chiefs Kenneth Morgan and Vito Spano and Chief Dominick Zarella.

The case is being prosecuted by Labor Bureau Section Chief Felice Sontupe and Assistant Attorney General Meredith McGowan, under the supervision of Bureau Chief Terri Gerstein, Executive Deputy Attorney General Alvin Bragg, Executive Deputy Attorney General Kelly Donovan, and First Deputy of Affirmative Litigation Janet Sabel.

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