A Queens nonprofit — which counts indicted Democratic state Sen. Malcolm Smith and ethics-probed Rep. Gregory Meeks as benefactors — cheated its workers out of wages while throwing lavish parties for friends of the charity’s chairman and CEO, a new lawsuit charges.
Five former employees are suing the now-shuttered Jamaica Business Resource Center for $250,000 saying they stopped receiving full paychecks in 2012 and then were fired in 2013 for complaining about not getting paid.
“Throughout the course of this time, the JBRC would periodically pay the plaintiffs a fraction of what they were owed despite having additional funds to throw elaborate galas for the defendants’ friends and church members,” says the Manhattan civil suit, which was filed Monday.
The soirees “cost several hundreds thousand dollars (sic) but allowed the defendants to use the money they owed employees to maintain their personal reputations within the community.” the suit says.
The allegedly stiffed staff — from senior business adviser Damir Hubana to custodian John Thomas — say chairman Edward Reed and CEO Timothy Marshall hosted the bashes at luxe Manhattan hotels like the Mandarin Oriental and The Pierre, according to their attorney John Scola.
The JBRC, which was supposed to help minority-owned small businesses, was the recipient of a $275,000 grant from Smith in 2010. Democrat Meeks spoke at events at the center in 2010, 2011 and 2012.
The year before the center started having money troubles Marshall and Reed feted another scandal-scarred politician — former city Comptroller John Liu — at The Ritz-Carlton in Battery Park.
The event featured “an elegant champagne reception at the rooftop terrace overlooking the Hudson River.” to celebrate the nonprofit’s 15-year anniversary.
At the time, the organization said it had pulled in a total $585 million in government funding for “the creation and retention of hundreds of much needed jobs through the New York metropolitan area,” according to a 2011 a press release.
But Scola said the group wasted taxpayer dollars by giving away nearly half of the 200 tickets at $300-a-plate dinners to friends.
The center filed its last financial disclosure form with the state’s attorney general last year. The long-overdue 2011 statement showed the group was in the red, having brought in only $298,817 while spending $656,492 on expenses, including $95,000 on Marshall’s salary.
The suit says the director and other board members sent worried e-mails about the payroll problems, with Reed directing Marshall in one message “to calm down the employees in order to avoid any uprising over the JBRC’s failure to pay [them] what they have earned.”
Meanwhile they were “actively lying to the plaintiffs about when they would be paid,” according to court papers.
The workers were fired in September 2013, yet when they went to file for unemployment, the state Labor Department had no record they had been employed, the suit claims.
The center’s phone has been disconnected and its front door is shuttered. A neighbor said center officials claimed they were moving locations about five months ago.
Reed and Marshall did not return messages.