The owner of an iron and erection construction company was sentenced this week for underreporting payroll to avoid paying $600,000 in workers’ compensation policy premiums.
According to Nassau County District Attorney Anne T. Donnelly, business owner Mahendranauth Khargie of Rockville Centre and his company, GC Stud Inc., of Queens, pleaded guilty to insurance fraud in October. GC Stud, Inc. also pleaded guilty to a violation of the New York’s workers’ compensation law.
Kargie was sentenced to a conditional discharge and made a full restitution payment of $625,000 to the New York State Insurance Fund (NYSIF). If Khargie had failed to pay the restitution for the lost premiums in full, he faced a prison sentence of two to six years.
“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,” said Donnelly.
“The restitution paid should serve as a deterrent to any business attempting to cheat the workers’ compensation system,” said NYSIF Executive Director and CEO Gaurav Vasisht.
According to the charges, annual audits by NYSIF Premium Fraud Investigators revealed the defendants substantially underreported the total amount of their payroll during three policy periods between April 2019 and March 2022, resulting in premium fraud.
As a NYSIF workers’ compensation policyholder, Khargie is required to provide financial records concerning income and employee payroll to NYSIF every year the policy holder renews its coverage. Prosecutors said that Khargie received large payments from three different steel and iron fabrication companies during the time of the investigation bur he and his company hid the money and did not provide that account to the NYSIF premium auditors.
Over the course of the scheme, Khargie underreported his payroll to NYSIF by more than $3.5 million, resulting in under payments of the company’s worker’s compensation policy premiums, according to prosecutors.
Khargie was arrested on September 4, 2025, in Mineola by members of the Nassau County District Attorney’s Detective Squad.
Topics
Fraud
Workers’ Compensation
Talent
Construction
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