Rockville Centre Man Pleads Guilty To Insurance Fraud: DA

ROCKVILLE CENTRE, NY. — A Rockville Centre man pleaded guilty to charges of insurance fraud Tuesday after officials say he underreported his business’s payroll by over $3.5 million.

Nassau County District Attorney Anne Donnelly said that 36-year-old Mahendranauth Khargie underreported the payroll for his Queens-based iron and erection construction business, GC Stud Inc., between April 2019 and March 2022. Khargie and GC Stud hold a workers’ compensation policy through the State Insurance Fund, meaning he has to provide financial records to the State Insurance Fund annually, Donnelly said.

With the payroll underreported, Khargie reportedly underpaid premiums on the company’s workers' compensation policy of more than $600,000, the DA said.

Khargie was arrested Sept. 4 in Mineola, and has a sentencing scheduled Dec. 2, Donnelly said.

Khargie is obligated to pay back $625,000 to the State Insurance Fund before that sentencing, or he could face a prison sentence of two-to-six years, the DA said. He is being represented by Astoria, Queens attorney Joe Nohavicka, who did not immediately respond to requests for comment.

“This calculated scheme of underreporting millions of dollars of payroll to defraud the state’s insurance system was a deliberate effort to gain an unfair advantage over businesses doing things the right way,” Donnelly said. “When employers cheat the system, they put workers at risk. We will continue to work with our state partners in holding businesses owners accountable when they try to undermine the integrity of systems put in place to help employees.”

“This guilty plea and significant restitution serve as a powerful deterrent to any business attempting to cheat the workers’ compensation system,” NYSIF Executive Director and CEO Gaurav Vasisht said. “NYSIF is committed to ensuring a level playing field for the thousands of honest employers in New York State.”

In addition to Khargie's charge, GC Stud issued a guilty plea in response to a charge of effect of failure to secure compensation under New York workers' compensation law, a class-E felony, the DA said.