Sky Materials Corp. owner committed insurance fraud, DA says

A Long Island businessman whose company has been accused of manslaughter in a trench collapse that killed an Ecuadorean immigrant worker last year was charged with insurance fraud in Manhattan state court on Tuesday.

Michael Cholowsky, 52, of Manhasset, and his company Sky Materials Corp, were accused of hiding more than $3 million in payroll to save more than $1 million in workers’ compensation premiums between 2013 and 2015.

Prosecutors also alleged that in two different registrations with New York City’s Business Integrity Commission, Cholowsky and Sky claimed fewer than 20 workers when they actually employed 50 from 2012 to 2014 and 150 from 2014 to 2015.

Cholowsky pleaded not guilty and was released on a $300,000 bond during a brief court hearing.

Sky, an excavation contractor with locations in Queens and Calverton, and others were charged last year with manslaughter in the death of Carlos Moncayo, 22, the Sky worker who was crushed when a trench collapsed at a Manhattan construction site.

Sky and its foreman were accused of ignoring unsafe working conditions. That case is pending.

Manhattan District Attorney Cy Vance said the financial discrepancies and false filings were discovered during investigation of the Moncayo case — Moncayo was not listed as an employee, prosecutors said — and linked that case with the new charges in a statement.

“Dishonest business practices hinder oversight and create potentially life-threatening hazards for workers and residents,” Vance said.

Cholowsky and Sky are charged with two counts each of offering a false instrument and of insurance fraud for understating payroll to the New York State Insurance Fund. Prosecutors said he fired a bookkeeper who revealed true payroll information in a 2014 audit.

He was previously a key figure in the Brookhaven landfill scandal in Suffolk County, serving as an important cooperating witness for the government, and pleading guilty to one count of conspiracy to defraud the government.

At the trial in 1999, according to Newsday reports, he admitted he lied on four years of tax returns and paid workers more than $100,000 off the books to save on taxes. He was sentenced to a year on probation in 2000 after prosecutors went to bat for him.

His defense lawyer is George Stamboulidis, previously a federal prosecutor in the Brookhaven landfill cases. Stamboulidis declined to comment on the new charges, and Sky lawyer Brian Gardner also did not comment.