The owner of an iron and erection construction company was sent
enced 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 Rockvill
e Centre and his company, GC Stud Inc., of Queens, pleaded guilty to insurance fraud in October. GC Stud, In
c. 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 Yo
rk 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 at
tempting to cheat the workers’ compensation system,” said NYSIF Executive Director and CEO Gaurav Vasisht.
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According to the charges, annual audits by NYSIF Premium Fra
ud Investigators revealed the defendants substantially underreport
ed the total amount of their payroll during three policy periods betwe
en April 2019 and March 2022, resulting in premium fraud.
As a NYSIF workers’ compensation policyholder, Khargie is required to provide financial records concerning in
ome and employee payroll to NYSIF every year the policy holder renews
its coverage. Prosecutors said that Khargie received large payment
s from three different steel and iron fabrication companies during the time of the investigation bur he and his comp
any 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, result
ing 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.