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Twin Cities contractor charged with labor trafficking, insurance fraud and theft

9/26/2018 9:20:17 AM

MINNEAPOLIS – The Minnesota Commerce Department announced that a Twin Cities construction contractor has been charged with labor trafficking, insurance fraud and theft by swindle for using undocumented workers on his construction crews and threatening to have them deported unless they followed his orders, including working long hours without overtime pay. He also did not provide workers’ compensation insurance, as required by state law. When one worker was severely injured on the job, he lied about how it happened and forced the worker to apply for public and charity medical assistance, totaling more than $45,000.

The charges were filed against Ricardo Batres, age 46, of Crystal, by the Hennepin County Attorney’s Office, based on an investigation by the Minnesota Commerce Fraud Bureau.

Batres was arrested Tuesday and he is expected to make his first court appearance Wednesday or Thursday. Prosecutors have asked for bail of $200,000. 

The case is one of the first times a labor trafficking charge has been brought in Minnesota. It is the result of information reported by labor unions, the Center for Workers United in Struggle (CTUL) and The Advocates for Human Rights. 

“The facts as described in the criminal complaint shock the conscience,” Commerce Commissioner Jessica Looman said. “The defendant mistreated and abused these workers for his own profit. His insurance fraud was part of a much broader pattern of exploitation against the workers he employed. I am so proud of the work our Commerce Fraud Bureau did to investigate these worker abuses.”

“By underpaying and failing to purchase workers’ compensation insurance, Mr. Batres took work away from employers and their workers who were playing by the rules,” Hennepin County Attorney Mike Freeman said. “Further, when one of his employees was seriously injured, he claimed it did not happen on a worksite and government agencies and charities paid thousands of dollars to help with the injured man’s care. This is reprehensible. We will vigorously prosecute Mr. Batres and we hope this serves as a warning to developers and general contractors to not turn a blind eye to this kind of illegal activity.”

“Human trafficking yields an estimated $150 billion worldwide each year,” said Robin Phillips, Executive Director of The Advocates for Human Rights “Minnesota is not immune to this human rights abuse, which relies on violence and threats to force people to work without pay, in dangerous conditions, and in fear. Human trafficking thrives when systems fail to hold those who profit from exploitation accountable. Today’s charges send an important message that Minnesota will not stand by when workers are victimized.”

According to the criminal complaint

Batres recruited men to work for his company, American Contractors and Associates, LLC, to do wood wall framing and sheetrock installation. Batres knew the men were undocumented workers and used that leverage to force them to work long hours at low pay and without adequate safety protection. He also did not purchase workers’ compensation insurance, as required by law. He told his employees they would lose their job and be deported if they went to a doctor for injuries suffered on the job.

Batres started his company in 2008 and received a residential building contractor’s license. Some of the illegal conduct began then, but the complaint focuses on 2017. In May of that year, he hired about a dozen men, promising them wages, benefits and, in some cases, housing. However, once they arrived at the job sites, they learned that they were working 10 to 12 hours a day, usually six days a week. They were not paid any overtime and they were often working as high as six stories above ground without proper safety equipment.

During that summer, a number of employees were injured on the job. They stepped on nails, had the prefabricated walls fall on them and sometimes fell from various heights to the ground. Batres had lied to state agencies, claiming he employed no workers and therefore did not have workers’ compensation insurance. Instead, he would send the injured workers to a massage therapist and promise to pay them while they were not working. That turned out not to be true, and several employees returned to the job site while still injured.

Around July 5, 2017, a number of the workers began talking about leaving Batres. They were angry about the injuries that were occurring and the lack of medical care. Batres also had put them up in a house in Bloomington that was overcrowded and had no hot water, and he had stopped paying their rent. Batres knew of the talk among the men and Batres said he would be ruined if they stopped working for him. 

On July 11, as the men left the Bloomington house, agents from Immigration Customs and Enforcement (ICE) arrested them. Some were quickly deported, but one man was able to get an immigration bond and was released. Batres was there waiting for him.  He helped the worker fill out paperwork in English and allowed him to come to Batres’ home to make his weekly check-in call to ICE. During one of these meetings, Batres told the worker: “Don’t leave me, you have to continue working with me until we finish this. If you try to leave, I can harm you. If you leave me, you’ll lose all of the good opportunities you have with me.”

The man stayed. However, in November 2017, he was seriously injured when a prefabricated wall fell on him. Over Batres’ protests, his co-workers drove him to the hospital.  Batres caught up to them and translated for the man with the doctors. He lied to the hospital staff, telling him the accident occurred at Batres’ house, not at a job site, because he knew he did not have workers’ compensation insurance.

As a result, the injured man’s care was paid for by taxpayers and charities. More than $31,000 was covered by Medicaid, more than $10,000 by MinnesotaCare and an additional $4,200 was paid by Hennepin County Charity Care program.

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