Owners of Minnesota drywall company get 6-month sentence for workers' comp scheme

A husband and wife who ran a Minnesota drywall company have been sentenced to six months of house detention for cheating their employees out of workers' compensation insurance and pocketing more than $300,000.

LeRoy Mehr, 51, and Joyce Mehr, 50, both of Annandale, were sentenced Monday in Hennepin County District Court after pleading guilty last month to theft by swindle.

Along with their time under electronic home monitoring, the sentence for each from Judge Regina Chu includes 30 days of community service and $30,000 in fines. They also must repay their insurance provider, Federated Insurance, more than $309,000 in lost premiums.

Authorities alleged that the Mehrs mischaracterized dozens of employees for their Clearwater company as independent contractors in order to save money on workers' compensation insurance premiums.

Independent contractors are required to supply their own workers' compensation insurance.

The now-defunct company had worked on thousands of offices, apartments, and homes for more than 30 years, according to its website.

Statements were presented during sentencing from the Minneapolis Building and Construction Trades Council and the North Central States Regional Council of Carpenters. Both condemned the Mehrs' conduct and contended that they contributed to a problem in the construction industry of employers being faced with the choice of engaging in similarly unlawful schemes to keep their bids competitive or losing out on projects.

Paul Walsh • 612-673-4482