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Business Owner Sent To Prison For Dishonest Employment Practices

According to an article in the Mat-Su Valley Frontiersman (Wasilla, Alaska), a man who hired illegal workers and paid them in cash for at least three years has now been sentenced to one year in prison followed by three years probation, and has been told to pay $336,753 following an investigation by the Internal Revenue Service.

Esteban Lane Stubbs hired undocumented immigrants for his drywall business in the Anchorage Alaska area, paying them in cash to avoid having to pay them fair wages and benefits.  While Alaska does not yet have any laws which address wage theft and employee misclassification, Stubbs was convicted of “structuring a financial transaction” because of his attempt to hide the way he paid his employees.  Knowing that a bank is required to report cash withdrawals over $10,000 to the IRS, Stubbs routinely withdrew smaller amounts on consecutive days from different branches of First National Bank Alaska.

The article quotes a press release from the US Attorney’s Office in Alaska as saying:

“These low wages and the absence of costs for income taxes, employment taxes, workers compensation, unemployment insurance and other benefits paid by legitimate employers allowed Stubbs to underbid fellow contractors and gain a significant share of the drywall business in the Anchorage Bowl and Matanuska-Susitna Valley.”

This case is another example of the need for strict worker misclassification and wage theft laws, and also shows that law enforcement agencies are having to get creative at times to battle these dishonest practices until federal laws are implemented.

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