Projo 7 to 7 News Blog

PROVIDENCE -- A Johnston man pleaded guilty in federal court today to extorting kickbacks from employees of his asbestos clean-up contracting companies, and he admitted failing to report about $450,000 in income on two years' tax returns.

Michael Macaruso, 50, of Bishop Hill Road pleaded before U.S. District Court Judge William E. Smith to one count of extorting kickbacks from public works employees, which carries a maximum five years' imprisonment and a $250,000 fine, according to a news release from U.S. Attorney Robert Clark Corrente's office.

Macaruso also pleaded guilty to one count of filing a false tax return, which has a maximum penalty of three years in prison and a $100,000 fine.

Macaruso's companies, Ocean State Building Wrecking and Asbestos Removal, and Ocean State Environmental Inc., did asbestos abatement for several public entities -- including the Providence, Cranston, and North Providence housing authorities, the Providence School Department and the town of South Kingstown.

Prosecutor Lee H. Vilker said at the plea hearing the government could show Macaruso submitted documents reporting he was paying his workers prevailing wages, but cashed their paychecks himself and then dispensed cash to the workers at "significantly less than the prevailing wage," the news release said.

Ten employees reported Macaruso had held back some of their pay. The investigation found that between July 2003 and December 2006, he withheld about $95,000 due his workers.

Federal law requires workers on public sector projects receive prevailing wage, as calculated by the U.S. Department of Labor.

-- projo.com staff writer Michael P. McKinney

 Tags  Johnston

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