NEW YORK — After a criminal trial, a New York state court sentenced a Papa John’s Pizza franchisee for implementing a wage theft scheme against its employees and then attempting to conceal the crime. The franchisee, Abdul Jamil Kohkhar, and his company, BMY Foods Inc., owned and operated nine Papa John’s restaurants in the Bronx and admitted that they violated the Fair Labor Standards Act (FLSA) in concealing overtime work by asking some employees to log into the company timekeeping system under fake names when they exceeded 40 hours in a week.
FLSA Violations and Fraud
The New York Attorney General brought the criminal charges against Kohkhar and BMY – a misdemeanor charge for failing to pay wages under New York labor law and a felony charge for falsifying business records. Khokhar apparently filed fraudulent state tax returns leaving out cash payments they made for those extra hours worked by employees without payment of overtime. The case has the distinction of being the first criminal case by a state attorney general against a fast-food franchisee for cheating his workers out of wages.
The defendants in the case agreed to plead guilty and pay $230,000 in state restitution, $230,000 in liquidated damages, and a $50,000 penalty. The New York Attorney General also indicated that it anticipated a 60-day jail sentence for Kohkhar.
According to the U.S. Department of Labor (DOL), Khokhar is not the sole Papa John’s franchisee who has violated FLSA. Recently, DOL and the New York Attorney General revealed four settlements with current or former Papa John’s franchisees behind nine New York City locations that totaled almost $500,000.
Criminal Prosecution for Wage Theft
While there are currently no federal criminal penalties for wage theft, many states have imposed criminal penalties, including possible jail time, for violations of federal and state wage laws. According to a report by the National Employment Law Project, thirty states and the District of Columbia have criminal penalties for unpaid wages in their state wage and hour laws. In a few states, a violation of any order of the labor commissioner, including wage orders, is a misdemeanor. Thirty-eight states have added theft of wages or services provisions in their existing criminal codes. The criminal penalties may include fines to be paid into a public fund, restitution to victims of wage theft, and jail sentences.
States are increasingly recognizing the serious nature of wage theft and violations of FLSA and have begun imposing criminal penalties, in addition to pursuing civil remedies, for depriving employees of minimum wage and overtime rights. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that you have a valid wage claim. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.