Monica's Victims 

A Chinatown construction magnate may have ripped off taxpayers and workers for as much as $20 million. Now she's trying to evict Le Cheval.

Page 3 of 5

Public agencies that did business with Ung apparently didn't know how she was doing it either. It turns out that all they had to do was talk to Moscowitz, the electrical workers' union, the state Department of Insurance, or the county DA. And because they didn't and still have not, it could come back to haunt them.

State labor law says that any entity, including a public agency, that "knows or should know" a contractor is defrauding workers must conduct an investigation and fix the problem or face legal liability. The labor code defines "should know" loosely (Moscowitz is suing Fitzmaurice under the code). And now that Ung has been charged in criminal court, it will be tough for public agencies to contend they still don't know what NBC was doing. Nonetheless, it appears that the agencies have only conducted superficial inquiries so far.

For example, when asked why the City of Oakland was still employing and paying NBC to build the 81st Avenue library in East Oakland, Alex Nguyen of the City Attorney's Office said that city officials had found no evidence that NBC had engaged in fraud on the contract. However, the city's investigation apparently only included the examination of payroll records that NBC submitted to the city and didn't involve talking with former company employees who are suing NBC, or with the electrical worker's union, or with prosecutors, or with the state Department of Insurance.

As a result, the city appears to not know whether NBC's payroll records were fraudulent. Moreover, Moscowitz said in her investigation that she has yet to find an instance where NBC defrauded some agencies and not others, or defrauded some employees and not others. It was the company's "pattern and practice" to not pay the prevailing wage on public contracts and then to submit falsified records to the public agencies, saying that it did, she said. Lau also said he was paid $25 an hour on all the public projects he worked on and never once received the prevailing wage. "If you just look at the certified payroll records, you can't tell if anything is wrong," Moscowitz said.

Bill Withrow, president of the Peralta Community College District board of directors, which employed NBC on construction contracts at Laney College and at City College of Alameda, also said his agency's investigation uncovered no evidence that NBC had engaged in fraud on those projects. But when asked whether the inquiry included anything more than checking the payroll records that NBC submitted, Withrow referred questions to Jake Sloan, an independent consultant who conducted the examination, but he did not return a phone call seeking comment. Withrow said that the district originally withheld its final payment to NBC, but after Sloan's investigation, they decided to pay Ung everything she claimed she was owed.

But the conclusions of Sloan's investigation were flatly contradicted by Rivera, the insurance department investigator. She said in her sworn affidavit that Ung had defrauded workers while employed by Peralta. The college district's decision to pay Ung also angered Moscowitz and the electrical workers' union, because Moscowitz had asked the district to withhold payment of $782,000 to NBC because that was the amount of alleged fraud she had discovered involving the company's work at Laney and the College of Alameda. Moscowitz also said that neither Sloan nor anyone else from district contacted her to verify what she had uncovered.

In addition, Uno said Peralta had ignored their pleas to stop doing business with Ung last year. In fact, after the union told the board what it had found, Ung was an honored guest at a gala hosted by the Peralta Foundation. The emcee of the event was Willie Brown.

As for Oakland Unified, spokesman Troy Flint said that district had no reason to investigate NBC or Ung because it "no longer does business with them." However, under state law the district may be still be liable, because Rivera singled out Oakland Unified in her affidavit, saying Ung had committed fraud while working for the district. The district employed NBC on construction contracts at Skyline High School and Piedmont Avenue Elementary School, according to records gathered by Moscowitz.

As for Alameda Unified, Kurt Viera, an independent consultant who managed NBC on its contracts for the district and conducted a review of its payroll practices, acknowledged that he only looked at the records supplied by Ung's company. The district hired NBC for about $4.5 million of contracting work at Edison, Otis, and Donald Lum elementary schools.

NBC also was employed by Alameda County; the cities of El Cerrito, Walnut Creek, San Francisco, and Daly City; and the school districts of Fremont, Mount Diablo, San Francisco, and Reed Union (Marin County).

Richard Alarcon, the former Democratic state senator from Los Angeles who wrote the 2003 California labor law that holds public agencies responsible for their contractors, said that this case is exactly what he had in mind when he wrote the bill. "The intent of the bill," explained Alarcon, who is now a Los Angeles city councilman, "is to make employers, in this case public agencies, pay close attention to what their contractors are doing and to ensure a high-level of due diligence."

Comments (9)

Showing 1-9 of 9

Add a comment

Subscribe to this thread:
Showing 1-9 of 9

Add a comment

Anonymous and pseudonymous comments will be removed.

Readers also liked…

  • Surfing Coffee's "Third Wave"

    New East Bay cafes take their coffee very seriously. Some say too seriously.
    • Dec 16, 2009
  • Quit Your Church!

    It was bad enough when evangelical broadcaster Harold Camping falsely predicted the apocalypse. But his latest crusade really has Christians fuming.
    • Jul 2, 2003
  • The Blair Park Project

    Controversy is swirling around a plan to build a large sports complex on Piedmont's last remaining parcel of open space.
    • Jun 22, 2011

Latest in Feature

  • The Gunrunner and the Peacemakers

    Oakland's gun violence epidemic seems impossible to stop. But the story of a local firearms trafficker illustrates how laws that make it tougher to buy guns can help reduce violence.
    • Jan 27, 2016
  • Cap and Clear-Cut

    California's cap-and-trade system, which has been touted as a model for reducing greenhouse gas emissions worldwide, allows timber companies to clear-cut forests.
    • Jan 20, 2016
  • Trapped Part Two: The Vicious Cycle of Trauma

    California prisons fail to help abuse victims and the mentally ill rehabilitate behind bars — and refuse to grant them parole so they can turn their lives around with loved ones on the outside.
    • Jan 13, 2016
  • More »

Author Archives

  • PG&E's Assault on Solar Power

    Last month, state regulators gave in to PG&E's demands and made it tougher to expand large-scale solar projects. Now, the utility wants to roll back incentives for rooftop-solar energy.
    • Jan 27, 2016
  • Why Yosemite Was Right to Change the Names of Iconic Places

    The park service's decision to rename iconic place names in Yosemite National Park, because of a legal dispute, will likely eviscerate the exaggerated financial claims made by Delaware North.
    • Jan 20, 2016
  • More»

Most Popular Stories

  • The Real Brooklyn by the Bay

    Oakland is often compared to Brooklyn, New York. But did you know that much of East Oakland actually used to be called Brooklyn?
  • When Landlords Lie

    Last year, Charles Oshinuga’s landlord lied in court while trying to evict him and his neighbors. Yet despite winning a jury trial, Oshinuga still lost his Oakland home.
  • Proposed Dam Sparks Government Fight

    Two federal agencies are at odds over a controversial proposal to build a giant dam on the San Joaquin River — as residents who would be displaced by the dam gird for battle.
  • The Gunrunner and the Peacemakers

    Oakland's gun violence epidemic seems impossible to stop. But the story of a local firearms trafficker illustrates how laws that make it tougher to buy guns can help reduce violence.
  • Cap and Clear-Cut

    California's cap-and-trade system, which has been touted as a model for reducing greenhouse gas emissions worldwide, allows timber companies to clear-cut forests.

Special Reports

2015 Year in Review

Our writers reflect on housing, the arts, music, food, Black Lives Matter activism, politics, weed, and much more.

Holiday Guide 2015

Your guide to the best gifts, gadgets, toys, music, and books of the year; plus holiday food and drink, snow sports, winter getaways, and more.

© 2016 East Bay Express    All Rights Reserved
Powered by Foundation