Trucking co. investigated for alleged payroll fraud

The Trucker News Services

2/4/2008

MINNEAPOLIS — Authorities have searched the St. Cloud offices of a Minnesota trucking company and the home of its owner as part of an investigation into whether the company shorted payroll checks of drivers and submitted fraudulent records to the government.

Federal court records unsealed Friday show that authorities searched Watab Hauling and Gary Bauerly's home for evidence of mail fraud and false statements relating to highway projects.

A message left Monday for Bauerly or a Watab representative was not immediately returned to The Associated Press.

According to a statement by Chris R. Smith, a special agent with the Department of Transportation's Inspector General's Office, Watab Hauling has worked on at least a dozen federally funded road projects in Minnesota since 2005. Contractors receiving federal dollars must pay workers prevailing wages, and overtime pay is required for employees working over 40 hours a week.

Smith said some Watab employees weren't getting prevailing wages.

One employee said Bauerly called a meeting and told about 30 drivers to sign their prevailing wage checks back over to him, Smith said.

"In another meeting last year, Bauerly told the drivers they needed to sign a form stating they forfeit the prevailing wage," he said. "Bauerly told them if they did not sign over their prevailing wage checks, he would not call the drivers that did not sign the form as often to work."

In addition, Smith's affidavit said Watab Hauling's records show that there were false reports on certified payrolls, including underreported hours, underpayment of wages and nonpayment of overtime. The company hasn't submitted certified payroll records on at least six of the 12 projects it's done in the past two years.

Gary Bauerly LLC owns and operates Watab Hauling LLC, according to a 2003 lawsuit brought against them by the U.S. Department of Labor. That complaint alleged that Watab Hauling underpaid drivers for time they spent picking up, preparing and inspecting trucks. An audit found that 64 drivers had been shorted $84,880.55 in overtime back wages between May 2001 and October 2002, and that Watab Hauling had failed to pay four employees minimum wage for all hours worked.

The case was settled with Bauerly and Watab Hauling promising to comply with minimum wage laws and to keep proper payroll records. They also had to pay four employees $3,486.36 in back wages and damages.

Three other Minnesota trucking companies have also been investigated recently for allegedly falsifying payroll records.