Local News

Subcontractors Banned from Working in La Porte

(La Porte, IN) - A pair of subcontractors are now prohibited from doing any more construction jobs in LaPorte after being charged with tax fraud and other counts related to hiring undocumented workers.


On Tuesday, the city’s Board of Public Works and Safety voted to suspend the contractor licenses of Adeeb Kupty and his son, Fadi Kupty, for two years.


The owners of Pro Paint and Finish, LLC and Drywall Hanging Services, LLC  out of Goshen were recently charged in LaPorte Circuit Court with Level 5 and Level 6 felony crimes, including fraud, money laundering, and obstruction of justice.


Mayor Tom Dermody said the licenses allowing them to do business in the city might be revoked if convicted of the criminal allegations.


“Obviously, people are innocent until proven guilty. We’ll watch the court process closely, and if they’re found innocent, we’ll reinstate,” Dermody said.

According to court documents, they were subcontractors at The Banks, an over $30 million resort-type apartment complex going up at NewPorte Landing beside Clear Lake. The Kupty’s worked on the project under Flaherty & Collins Properties, the general contractor based in Indianapolis.


City Engineer Nick Minich said license suspensions were because of violations of the city code governing illegal hiring practices. He credited Flaherty & Collins for shedding more light on what was transpiring at the job site.


“Without their help, we wouldn’t be able to kind of root out the bad actors,” Minich said.

Tenants started moving into the first building with more than 60 units last month. Two other multi-story structures containing a similar number of apartments are expected to be finished in the fall.


According to court documents, it’s alleged the father and son business duo hired dozens of people for things like hanging and finishing drywall. However, they intentionally failed to properly document the workers to avoid withholding payroll taxes or provide them with workman’s compensation and unemployment benefits.


Court documents also revealed each group of workers over a several-month period was paid below the prevailing wage with a single check. After the checks were cashed, the money was distributed individually to the workers.


Dermody, a former 10-year Indiana State Representative, said illegal hiring practices hurt local economies and cost the state hundreds of millions of dollars in tax revenue a year.


“LaPorte is not a dumping ground for people to work around the rules, and I think we made that clear,” Dermody said.

State Senators Mike Bohacek of Michiana Shores and Rodney Pol, Jr. of Chesterton, and State Representative Jim Pressel of Rolling Prairie, with the backing of labor unions, are trying to rally support in the legislature for measures aimed at clamping down further on illegal hiring practices.

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