SUFFOLK COUNTY, N.Y. — A Suffolk County, N.Y. roofing contractor admitted to cheating insurance companies out of more than $250,000 in a workers' compensation fraud scheme.

Peter Chardon, owner of DME Construction Associates Inc., pleaded guilty on Wednesday at Suffolk County Supreme Court to charges of petit larceny and fifth-degree insurance fraud. His company pleaded guilty to one count of second-degree grand larceny and second-degree insurance fraud.

As part of the plea agreement, Chardon and DME have agreed to pay a total of $297,451.13, which represents the amount of funds stolen from the New York State Insurance Fund (NYSIF) and State Farm Fire and Casualty Company.

Inspectors found that DME Construction and Chardon, of Setauket, N.Y., classified its roofing workers as doing "painting and decorating," a less risky classification that granted access to less expensive workers’ compensation insurance. Officials say DME’s contracts for Long Island shopping mall buildings and a new cancer center building for Southampton Hospital were for roofing, and not for "painting and decorating." During the period between 2015 and 2019, DME was insured by NYSIF and then State Farm. The Inspector General referred the matter to the Suffolk District Attorney, which served additional subpoenas on other DME clients.

According to Suffolk County District Attorney Raymond A. Tierne, DME knowingly underreported its payroll to the NYSIF, resulting in an underpayment of premiums in the amount of $65,875.13. Between Feb. 20, 2017 and May 27, 2021, DME knowingly underreported its payroll to State Farm Fire and Casualty Company, resulting in an underpayment of premiums in the amount of $231,576.

"Worker’s compensation insurance is designed to protect the health of our workers within a framework that will not bankrupt the New York State Insurance Fund," said Tierne. "By deliberately lying to save themselves money, these defendants endangered workers and increased construction costs for those who play by the rules by refusing to pay their fair share to keep workers safe."

DME Construction is also facing proposed $1.2 million penalty from the Occupational Safety and Health Administration (OSHA) due to one of its workers dying after falling 18 feet through an unprotected skylight on Aug. 19, 2021. Prior to this inspection, OSHA had cited DME seven times since 2011 for fall-related hazards, including not providing protection from falls through skylights and from roof edges, with more than $50,000 in unpaid fines.