A.G. Schneiderman Announces Arrest Of Manhattan Restaurant Owner Who Allegedly Failed To Pay Workers

Defendants Are Charged With Repeatedly Failing To Pay 34 Restaurant Workers

Hundreds Of Thousands In Wages

Schneiderman: My Office Will Take Aggressive Action Against Any Employer Who Breaks The Law By Cheating Their Workers

   Attorney General Eric T. Schneiderman announced the arrest and arraignment today of Konstantinos Aronis, owner of K.M.S. Restaurant Corp. (“K.M.S.”), for allegedly failing to pay 34 workers hundreds of thousands of dollars in wages. It is charged that Aronis and K.M.S. stole tips from their employees and did not provide payment for overtime hours, while subsequently filing false documents with New York State in order to hide these violations and avoid the payment of unemployment insurance.

“This alleged scheme was a blatant attempt to steal from hard working New Yorkers, and then cover it up,” Attorney General Schneiderman said. “A worker’s most basic right is the right to be paid for his or her labor, and my office won’t hesitate to take action against any employer who breaks the law by cheating their employees.”

“New York State will not tolerate the mistreatment of workers,” said New York State Labor Commissioner Roberta Reardon. “Under Governor Cuomo’s strong leadership, state agencies, including the New York State Department of Labor, continue to combat worker exploitation and misclassification to make sure all New York State workers are paid and treated fairly. I thank Attorney General Schneiderman and his team for working with us and for bringing Mr. Aronis to justice.”

According to the felony complaint and statements made in court at the arraignment, between May 2012 and May 2016, Aronis and K.M.S. employed workers at three restaurant/deli locations in Manhattan: Nations Café at 875 1st Avenue, Plaza Diner at 1066 2nd Avenue, and Hamilton Deli at 1072 2nd Avenue. The investigation revealed that most of the employees worked more than 60 hours per week -- but Aronis and K.M.S. paid the workers a weekly salary without the required overtime rate for their hours over forty each week, and also took a percentage of the tips that some of the workers earned. By carrying out this scheme, the defendants deprived workers of hundreds of thousands of dollars in wages earned.

In addition to refusing to pay their workers properly, the defendants allegedly created and filed false tax reporting documents.  It is charged that the defendants falsely omitted employees and wages from their New York State Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Returns and failed to pay the required New York State unemployment insurance contributions for all employees.

The felony complaint, filed in Manhattan Criminal Court, charges Aronis and K.M.S. with one count of Offering a False Instrument for Filing in the First Degree, an E felony; and one count of Failure to Pay Wages in Accordance with the Labor Law, an unclassified misdemeanor.

The defendants were released on their own recognizance. The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty in a court of law. 

The Attorney General thanks the New York State Department of Labor Office of Special Investigations, Labor Standards Division, and Unemployment Insurance Division for their assistance in this investigation and prosecution.