Drywall firm owner gets 2 year-term for cheating labor

The U.S. Department of Labor wants employers to take note of what happened this week to the owner and president of Franklin Drywall in Little Canada.

Philip Joseph Franklin, 49, of Leesburg, Va., was sentenced Thursday in St. Paul to two years in a federal prison for providing a false statement to two labor union pension and benefit funds as part of his scheme to underpay employees for overtime and short the union for pension and benefit contributions.

Federal prosecutors also asked the court to order Franklin to pay nearly $3.3 million in restitution. U.S. District Judge Donovan Frank said he'd consider the request and rule later.

"This sentencing shows that the Labor Department is committed to ensuring that justice is served for those who steal from their workers," James Purcell, acting regional director of the U.S. Department of Labor's Employee Benefits Security Administration office in Kansas City, said in a statement. "We continue to aggressively investigate those who steal from plan participants and their beneficiaries through our Prevailing Wage Regional Project."

Franklin admitted in a plea agreement to filing false reports with Minnesota Carpenters Pension and Benefit Funds and the Painters and Allied Trades District Council No. 82 Pension and Benefit Funds.

He had his employees falsify time sheets and reports to the union pension and benefit funds, under-reporting the hours they worked.

"To evade reporting and paying fringe benefits for the number of hours actually worked, Franklin directed that employees who worked more than 40 hours (a) be paid for excess hours on a separate paycheck at the straight hourly rate, rather than the overtime rate; or (b) be paid for excess hours at the straight hourly rate on paychecks marked as 'other pay,'" the U.S. attorney's office said Friday in a news release about the case.

The Labor Department investigated the case, which was prosecuted by Assistant U.S. Attorney Tim Rank, the new head of federal white collar crime prosecutions in Minnesota.

Terry Nelson, business manager/secretary-treasurer of the Painters and Allied Trades Council that represents many of the underpaid employees, said in a statement that Franklin's conviction "sends a strong message that being in hard times does not justify outright stealing from those who work for you."

"This is a company owner who counted on these men being too afraid to lose their jobs, when jobs are scarce right now, to say anything about this wage theft. What Mr. Franklin didn't seem to realize is that these men are represented by a union that isn't afraid to take any company on when its members' rights are violated," Nelson said.

Dan Browning • 612-673-4493