Astoria Discount Stores Underpaid, Threatened Employees, Feds Say

ASTORIA, QUEENS — The owners of two Astoria discount stores systematically underpaid their workers, then engaged in a coverup scheme by telling employees to lie to federal authorities who were investigating the shops, according to the U.S. Department of Labor.

The two stores, ABC Deals and Pick 99c, are based a few doors apart from each other on the same block of 31st Street between Ditmars Boulevard and 21st Avenue. The family-owned enterprises are managed by Mohammed Perwaiz and owned by his two sons, Hassan and Ahmad Perwaiz, according to the DOL.

A federal judge has now intervened in the case, which began in April when the DOL started investigating whether both stores were violating the federal wage law that requires overtime pay for more than 40 hours of work in a week.

In a visit to the stores that month, a manager told investigators that workers were paid 1.5 times their typical rate when they worked overtime — but that most employees only worked three to four days each week, the department said in a court filing.

By the following month, the stores' accountant told investigators that the businesses had no payroll records from before April, but pledged that they had started keeping records after the first meeting. Days later, the accountant gave DOL fraudulent time records, falsely stating that employees worked from only 9 a.m. to 2 p.m. and that nobody worked past 6:30 p.m. on May 25 — though investigators saw workers at both stores until 8 p.m. that day, authorities said.

On June 16, DOL met again with the Perwaiz family and told them the results of the investigation: that the stores had underpaid employees and broken overtime laws.

But the Perwaizes disputed the findings, and days later sent DOL a series of statements that they claimed had been written and signed by employees, attesting that they did not work more than 40 hours per week and had been paid proper wages. In fact, the statements had been written by the Perwaiz family themselves, investigators say — noting that the typed statements included nearly identical phrases.

Now, investigators say that Mohammed Perwaiz pressured employees to sign the false statements by getting upset and insisting that they do so when the workers resisted. He also told employees to lie to the department by saying they had written the statements, authorities say.

In at least one case, Mohammed Perwaiz made threatening statements about workers who cooperated with the department's investigation, DOL said in its court filing.

Because of the intimidation, workers at ABC Deals and Pick 99c have largely refused to pick up or return phone calls from investigators, and expressed fears of retaliation if they cooperated, the department said.

Reached for comment, an attorney for the Perwaiz family denied the government's claims, saying that the accusations against the Perwaizes were coming entirely from a single employee.

"[The family] has a number of employees who are willing to come forward and say, 'There was no overtime, we were paid properly,'" attorney Stephen Hans said. "You’ve got one unhappy camper saying he worked 80 hours a week."

"Sometimes employees don’t want to talk to the Department of Labor for a variety of reasons," Hans added. "That should not be taken as an employer exerting influence on them."

Saying the alleged intimidation was impeding their investigation, the DOL asked a federal judge last week to issue an injunction that would bar the Perwaizes from violating the federal wage law, threatening or firing any employees, or dissuading workers from participating in the investigation — and allowing a DOL representative to visit the store and read workers a statement describing their rights.

That order was granted the following day by Judge LaShann DeArcy Hall of New York's Eastern District court, records show.

"The employers’ illegal retaliation and obstruction are an egregious – if ultimately unsuccessful – attempt to dissuade vulnerable, low-wage workers from cooperating with a lawful investigation and to deprive them of their rights under the Fair Labor Standards Act," said Jorge Alvarez, the Department of Labor's Wage and Hour Division District director, in a statement.

"The U.S. Department of Labor is undeterred in its commitment to protect workers from such prohibited retaliatory conduct."

An investigation into the stores is ongoing, the department said.

Update, 10:45 a.m. Thursday: This story has been updated with comments from an attorney representing Mohammed, Hassan and Ahmad Perwaiz.