Diner Owners Plead Guilty to Underpaying Employees

Two cousins who own East Meadow’s Colony Diner pled guilty to charges that they failed to pay 72 employees more than $500,000 in wages, according to Nassau County District Attorney Kathleen Rice.

George Strifas, 46, of East Hills, Thomas Strifas, 41, of Merrick, and their company, Stardust Diners, Inc., pleaded guilty on Monday to felony counts of first-degree offering a false instrument for filing, first-degree falsifying business records and one misdemeanor count of failing to pay wages in accordance with the New York State Labor Law. 

As a condition of the plea, the diner owners agreed to pay underpaid minimum wage and overtime of $337,780 and liquidated damages of $163,742 to 72 employees, as well as $48,681 in unemployment insurance to the New York State Department of Labor (NYSDOL).

Rice said that the Labor Unit’s investigation into the Colony Diner began in March 2011 when the office was contacted by the United States Department of Labor (USDOL) in March 2011.

The USDOL began a wage investigation into the diner in late 2010. It was revealed through employee interviews that between January 2009 and November 2011, the diner’s wait staff was being paid about $2 or less an hour, the bussing staff was being paid off-the-books from the wait staff’s cash tips and that the kitchen staff was not being paid overtime despite working 50 to 60 hours per week.

State and federal law at the time of the violations mandated minimum wages of $4.65 for wait staff, $7.25 for bussing and kitchen staff and $10.875 per overtime hour worked. 

The investigation also revealed that Colony was paying the majority of its employees off the books, resulting in underpayments of its unemployment insurance obligations to New York State.

A search warrant executed at the diner in November 2011 revealed falsified payroll and time records and a second set of books with the actual pay rate and hours worked by the diner’s employees.  Records also indicated that the diner claimed on tax returns that only between 11 and 15 people worked at the diner, while they employed between 35 and 40 people in any given week.

George and Thomas Strifas face up to four years in prison at their July 17 sentencing.

“Labor laws exist to ensure that hard-working employees are paid every penny of their wages, as well as hold accountable unscrupulous bosses who steal from their workers,” Rice said.