Calverton sand mine owner indicted for alleged insurance fraud

03/02/2016 12:03 PM |

The owner of a Calverton sand mine was indicted in a Manhattan court Tuesday for concealing payroll information and the actual number of employees at his company, the Manhattan District Attorney’s office announced in a press release.

The indictment names Michael Cholowsky, 52, of Manhasset and a company he owns, Sky Materials Corp., and alleges they concealed more than $650,000 in payroll from the state insurance fund between April 2013 and 2014, and concealed more than $3 million in payroll from April 2014 to April 2015, resulting in a more than $1 million savings in workmen’s compensation insurance premiums.

According to the new indictment and court documents, Mr. Cholowsky claimed that Sky Materials employed fewer than 20 workers, when it actually employed at least 50 individuals between 2012 and 2014, and employed more than 150 individuals between 2014 and 2015, according to the DA.

Mr. Cholowsky and Sky Materials are each charged with one count of first-degree insurance fraud, one count of second-degree insurance fraud and two counts of first-degree offering a false instrument for filing.

A message left for Mr. Cholowsky at Sky Materials seeking comment on the case was not immediately returned. He was ordered held on $300,000 bond, according to the Manhattan DA’s office.

The indictment is the result of an investigation into an August 2015 indictment against Sky Materials following the death of an employee of the company who was killed at a Manhattan job site last April after a 14-foot trench prosecutors claimed was improperly secured collapsed. Sky Materials and a foreman at the construction site were indicted for second-degree manslaughter and criminally negligent homicide in that case, although Mr. Cholowsky was not named individually.

Mr. Cholowsky was in court with Riverhead Town for several years in the 2000s as the town accused his company of sand mining without a permit. The company no longer sand mines but still does processing and other activities at the Calverton site.

That 50-acre property also had been proposed as the site of a 315,000-square-foot solid waste transfer station and recycling facility as well as an indoor composting facility. That site plan application was filed in Riverhead Town Hall in various versions over the past decade but has never been approved. A company called East End Recycling, headed by engineer John Cameron, planned to lease 10 acres from Mr. Cholowsky for the recycling facility.

Mr. Cholowsky also had testified in court in 1999 that he had paid $20,000 to former Suffolk Republican chairman John Powell to secure access to the Brookhaven town landfill in Yaphank in a case that resulted in Mr. Powell going to jail.

Mr. Cholowsky pleaded guilty to “conspiracy to make corrupt payments,” a Class D felony, and was sentenced to one year of probation, according to court documents in that case.

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