Ramsey County Attorney John Choi (R) held a media briefing with Bricklayers Local 1 President Doug Schroeder (L) and Fair Contracting Foundation Executive Director Mike Wilde.
A local masonry contractor pled guilty last month to felony tax fraud after a joint investigation by the Ramsey County Attorney’s Office and the Minnesota Department of Revenue found that he failed to report $2.5 million in income and did not pay taxes that should have been withheld from his employees’ paychecks.
As part of the plea, Stillwater Masonry owner Todd Konigson received a sentence of three years’ probation. Konigson must pay over $70,000 in restitution to the state and forfeit his state contractor’s license, and he is barred from holding any position of authority in a construction, remodeling or masonry firm in Minnesota.
The charges stemmed from an investigation into Konigson’s books from 2017 to 2022.
County Attorney John Choi said the investigation began after his office received complaints that Konigson had failed to pay workers, sub-contractors and vendors related to work on the historic Masonic Temple in St. Paul.
Previously, Stillwater Masonry entered into an agreement with Bricklayers and Allied Craftworkers Local 1 to become one of the union’s signatory contractors. BAC Local 1 President Doug Schroeder said Konigson signed on to meet the terms of a project labor agreement (PLA) covering a publicly subsidized development in Duluth.
PLAs are pre-hire collective bargaining agreements that establish minimum conditions of employment – like wages and benefit contributions – on a project before contractors begin bidding on the work.
Stillwater Masonry failed to make the agreed-upon contributions to its workers’ health and pension funds on four projects, Schroeder said. The funds have since taken independent civil action to recoup most of what they are owed.
But Konigson’s blatant disregard for his workers was a red flag for investigators, according to Mike Wilde, director of the Fair Contracting Foundation, an independent watchdog in the public construction industry.
“An employer or a contractor, even those bidding on a public contract, if they’re willing to cheat the very people that do the work for them, then they’re certainly OK with cheating their subcontractor, the project owner or the taxpayer at large,” Wilde said during a press conference to announce the plea at the County Attorney’s offices.
Contractors who commit tax fraud aren’t just cheating the system, Choi said. They’re getting a leg up on responsible firms and cheating the public services that rely on tax dollars.
Choi’s office is one of the first in the state to hire a full-time wage-theft investigator, who has been prioritizing payroll fraud, misclassification and similar crimes since 2022.
“If we can develop true partnerships with our labor community, our advocacy community and create the conditions by which people can come forward – and also work out the systems that can investigate and prosecute these crimes – that’s the secret sauce to make (cases) like this happen,” Choi said.
– Michael Moore, Union Advocate editor
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