Rockville Centre Business Owner Sentenced On Fraud Charges After Paying Restitution: DA

ROCKVILLE CENTRE, NY. — A Rockville Centre construction business and its owner were sentenced on insurance fraud charges Tuesday after pleading guilty on Oct. 21, prosecutors said.

Nassau County District Attorney Anne Donnelly announced Wednesday that 36-year-old Mahendranauth Khargie and his business, GC Stud, Inc., had been sentenced to a conditional discharge after making a $625,000 restitution payment to the New York State Insurance Fund (NYSIF). If Khargie had failed to make the restitution payment, he would have faced a sentence of between two and six years in prison, prosecutors said.

According to prosecutors, Khargie and the company were required to file annual financial records with the state to renew the company's workers' compensation insurance policy. In their audits, premium fraud investigators found that Khargie and the company had underreported the payroll of GC Stud by more than $3.5 million between 2019 and 2022, leading to the underpayment of more than $600,000 in workers’ compensation insurance premiums over the same timespan, prosecutors said. That underpayment, prosecutors said, constituted premium fraud.

“This company underreported millions of dollars of payroll, allowing them to dodge $600,000 in insurance premiums that every other honest employer has to pay,” Donnelly said. “This sentence holds the defendant and his company accountable, forcing them to pay what they owed all along. These kinds of schemes hurt workers and undercut businesses that follow the rules. My office will continue to call them out and make them pay their fair share or face prison time.”

Khargie was represented by Queens attorney Joe Nohavicka in the case. Nohavicka's office did not immediately respond to requests for comment from Patch Thursday. Prosecutors confirmed Thursday that Khargie will be under conditional discharge for three years.

In the words of NYSIF Executive Director Gaurav Vasisht, the sentencing and the payment required to make it happen could serve as an example for other businesses of what could happen if they try to make similar underpayments.

“The restitution paid should serve as a deterrent to any business attempting to cheat the workers’ compensation system,” Vasisht said. “I appreciate the partnership of the Nassau County DA’s office to prosecute this case.”