Swampscott Man Pleads Guilty to Embezzlement, Wage Law Violations

A 54-year-old Swampscott man and his business partner have pleaded guilty to charges that they took deductions from employees of their Georgetown plumbing company under the auspices of investing those wages in retirement accounts, which did not exist.

Keith Rhodes, of Swampscott, and Roy Cheever, 67, of Topsfield, pleaded guilty Friday in Essex Superior Court to seven counts each of Larceny by Embezzlement over $250 and seven counts each of Failure to Pay Prevailing Wages. Cheever also pleaded guilty to one count of Failure to Submit True and Accurate Certified Payroll Records.

An investigation into the now-defunct Cheever & Rhodes Mechanical, LLC commercial plumbing company revealed Cheever and Rhodes had taken more than $100,000 in deductions from their employees while claiming to put those deductions into 401K accounts. According to Attorney General Maura Healey, Cheever and Rhodes deducted amounts ranging from $2,000 to $30,000 per employee depending on the number of hours the employee worked.

“This business took advantage of their employees and misused taxpayer dollars,” Healey said in a statement. “Our office will continue to protect the rights and unpaid wages that are owed to workers throughout Massachusetts.”

Rhodes and Cheever were sentenced to one year each of probation during which time they cannot act as fiduciaries in any employee benefit plan or participate in public construction projects in Massachusetts. Additionally, both defendants were jointly ordered to pay more than $104,000 in restitution within 30 days. Of that amount, $44,000 has already been paid, according to a press release.

The investigation into the charges began after the Plumbers & Gasfitters Union Local 12 referred the company to investigators, alleging that from November 2010 through October 2011, Cheever and Rhodes underpaid seven of their employees who worked on the Union Crossing project, a public construction project in the City of Lawrence involving the redevelopment of a mill building.

Cheever and Rhodes were indicted in September and arraigned in October.