A New York-based property management company will provide $187,095 restitution to its Connecticut subcontractors and will pay a $50,000 civil penalty to the state of Connecticut under a settlement agreement resolving an investigation into the manner in which it calculated bonuses owed to its subcontractors, Attorney General George Jepsen and state Department of Consumer Protection Commissioner Jonathan A. Harris said today.

Ferrandino & Son Inc., headquartered in Farmingdale, New York, provides interior and exterior property maintenance services – including, but not limited to, snow and ice removal for commercial business locations – to over 100 commercial business sites in Connecticut.

The contracts that the company entered with Connecticut-based subcontractors to provide snow and ice removal services represented that its subcontractors would receive bonuses when there was an above average amount of snowfall. The bonuses were divided into three tiers, with the highest bonus awarded when the actual snowfall at the site was 20.1 inches or more above the "30-year historic snowfall rate."

The state's investigation found, however, that the majority of the pricing exhibits developed by Ferrandino & Son for the 2013-to-2014, 2014-to-2015 and 2015-to-2016 snow seasons listed a 30-year average annual snowfall for the Connecticut sites that was much higher than the actual 30-year average according to commonly accepted and verifiable meteorological sources. In some cases the 30-year average was inflated by as much as 30 inches over the actual historic average.

The state alleged that the inflated benchmark – which was not based on any industry standard or verifiable calculation and, thus, not a valid 30-year average – made it much more difficult for subcontractors to become eligible for a bonus. Many Connecticut subcontractors received either no bonus or a bonus that was at a lower tier – resulting in lower compensation – than they would have received if Ferrandino & Son had used a historically supported snowfall measurement for the site.

"Connecticut's small business owners deserve fair compensation for their hard work," said Attorney General Jepsen. "This investigation revealed that Connecticut-based subcontractors were being treated unfairly, in that they were paid less than what they were owed in light of the actual historical snowfall averages. I'm pleased that we were ultimately able to reach an agreement to provide restitution to the effected subcontractors in this case."

"We are pleased that Ferrandino & Son, Inc. agreed to provide restitution for many of the state's hardworking small businesses who were not properly paid for their snow-plowing services," Commissioner Harris said. "The subcontractors in this case lost a lot of money because of the defendant’s dishonest bonus system, which took advantage of the unpredictability of weather patterns. Businesses in Connecticut must meet the highest ethical and legal standards whether their customers are consumers or other businesses."

Under the settlement agreement, Ferrandino & Son will provide restitution to its Connecticut subcontractors totaling $101,345.22 for the 2013-to-2014 snow season and totaling $85,750.68 for the 2014-to-2015 snow season. The company will also pay a civil penalty of $50,000, which will be deposited into the state's General Fund.

Assistant Attorneys General Natasha Freismuth, former Assistant Attorney General George O'Connell and Michael Cole, chief of the Antitrust and Government Program Fraud Department, assisted the Attorney General with this matter.

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