Pa. contractor accused of stealing $20 million from workers in largest ever prevailing wage case

One of Pennsylvania’s largest construction companies allegedly stole more than $20 million from workers’ health and retirement money and now faces charges in the largest prevailing wage criminal case on record, state Attorney General Josh Shapiro said Thursday.

Glenn O. Hawbaker Inc., based in State College, has been charged with four counts of theft relating to violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act. The laws ensure that contractors working on state or federally funded projects pay a prevailing wage, or the average wage paid to similar workers, set by regulators.

Hawbaker, founded by Glenn and Thelma Hawbaker in 1952, is one of the largest contractor companies in the commonwealth, receiving $1.7 billion from Pennsylvania’s Department of Transportation from 2003 to 2018, Shapiro said. Hawbaker has built hundreds of roads and bridges, Shapiro added. According to the Attorney General’s complaint, Daniel Hawbaker, one of Glenn and Thelma’s sons, has been president of the company since 1978.

The Attorney General accused the family-owned company of stealing workers’ retirement, health, and welfare money, costing employees tens of thousands of dollars from their retirement. Hawbaker allegedly underfunded employees’ retirement accounts to the tune of $15 million, Shapiro said.

Instead of putting money into 401(k) accounts for prevailing wage workers, the company used some of it to pay other workers’ pensions, “essentially taking from one group of workers to pay for the rest of the company,” Shapiro said.

“The guys doing the back-breaking work on Pennsylvania’s roadways had their retirements stolen from them,” Shapiro said during a news conference.

In a statement, Hawbaker said it has cooperated with the Attorney General and believes it has “always acted in accordance with all state and federal laws.”

“In an abundance of caution, the company immediately changed its prevailing wage practices,” the company statement said. “These changes remain in effect today as we continue to do what’s right for our employees, both past and present. Our company will continue to work constructively with the Attorney General’s office to reach a swift resolution.”

Hawbaker employs up to 1,200 people at any given time, according to the Attorney General’s complaint.

Shapiro said the firm also artificially inflated its records of health benefit spending. That created the appearance of providing employees with benefits that far exceeded the cost of those that it actually did.

The alleged scheme went on for decades, but Hawbaker could be charged only for the last five years due to the statute of limitations, according to the Attorney General.

Shapiro encouraged Hawbaker workers who think they may have lost benefits to call 814-746-3518.