Fall River Business Owner Pleads Guilty in Connection with Failing to Pay into Unemployment Trust Fund
Owner and Business Failed to Pay More Than $333,000 in Tax Contributions to Department of Unemployment Assistance
BOSTON – A Fall River man and his company have pleaded guilty in connection with failing to pay more than $333,000 into the Commonwealth’s unemployment trust fund, Attorney General Martha Coakley announced today. The case is the result of an investigation referred to the Attorney General’s Office by the Executive Office of Labor and Workforce Development’s Department of Unemployment Assistance (EOLWD\DUA) in a collaborative effort to target employers that fail to pay their quarterly unemployment contributions.
“Qualifying employers are required to pay contributions to the unemployment compensation fund in Massachusetts to ensure that benefits are available for eligible workers,” AG Coakley said. “Our enforcement effort aims to level the playing field for those businesses that already follow the law and assure compliance in the future.”
“This case demonstrate the success of our continued collaboration with the Attorney General on these important matters,” said Secretary of Labor and Workforce Development, Joanne F. Goldstein. “This case sends a clear message to legitimate employers that we support their efforts to play by the rules and will hold those who try to cheat the system accountable.”
Daniel Reitzas, 42, pleaded guilty to the charge of Non-Payment of Employer Contributions (22 counts). His business, Nemdigelt Corporation (Nemdigelt), also pleaded guilty to the charge of Non-Payment of Employer Contributions (11 counts). After the pleas were entered Judge Carol Ball sentenced Reitzas to five years probation and ordered him and his business to pay full restitution.
The Department of Unemployment Assistance (DUA) administers the Unemployment Insurance program, providing temporary assistance to unemployed workers. Funding for these benefits comes from Massachusetts employers. Employers either pay quarterly contributions into the trust fund or non-profit or governmental employers have the option to self-insure, reimbursing the state dollar-for-dollar for benefits paid.
Reitzas has been the president and treasurer of Northeast Knitting, a knitwear company incorporated in 1990, since 2004. Although the company had previously complied with its employer tax contributions, it stopped paying the necessary taxes beginning in the third quarter of 2006 through 2009. During this time period, the company continued to operate and pay wages to its laborers.
In 2009, Reitzas, also the president of Nemdigelt Corporation, a machinery equipment company incorporated in 1990, changed the name from Northeast Knitting to Nemdigelt. Following the name change, Nemdigelt failed to make proper contributions to EOLWD\DUA from the second quarter of 2009 through 2011. As a result of the fraud, Reitzas, Northeast Knitting and Nemdigelt failed to pay approximately $333,724 in employer contributions.
A Suffolk County Grand Jury returned indictments against Reitzas, Northeast Knitting and Nemdigelt on March 22, 2012. Reitzas was arraigned on April 24, in Suffolk Superior Court where he pleaded not guilty and was released on personal recognizance. Northeast Knitting and Nemdigelt were arraigned on June 1, where each company pleaded not guilty. Reitzas and Nemdigelt pleaded guilty Tuesday, were sentenced and ordered to pay full restitution. Charges against Northeast Knitting were dropped because the company is no longer in existence.
AG Coakley’s Insurance and Unemployment Fraud Division (IUFD) works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the Commonwealth’s unemployment insurance and workers’ compensation system. The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims. In 2011, IUFD obtained $5,578,934 in restitution orders in 33 matters.
To report unemployment fraud to the EOLWD\DUA, call the agency’s toll free fraud hotline at 1-800-354-9927 anytime, 24 hours a day. Callers may remain anonymous.
This case was prosecuted by Assistant Attorney General Jennifer Adreani of AG Coakley’s IUFD with assistance from investigator Rose Bagalawis the AG’s Office and Richard Carney, Director of Revenue Enforcement and Audit, from EOLWD\DUA.