Contractor accused of $600k City fraud

Whether it’s City Hall or the nation’s capital, government in the United States is supposed to be of the people, by the people, and for the people. And despite how rough it can appear, the system works more often than not.

But even an institution of the people can be compromised when proper oversight is lacking, a fact highlighted by reports of a Millbrae woman allegedly defrauding The City of more than $600,000.

The woman, Frances Ann Doherty, 51, owns Doherty Painting and Construction, and has won “dozens” of San Francisco city contracts.

Her scheme? When Doherty netted city contracts — awarded under the assumption that she would pay workers according to The City’s prevailing-wage laws — she allegedly underpaid her workers and pocketed the difference.

City-approved wages for construction/housing related professionals range from $14.31 per hour for a carpet installation trainee to $57.50 an hour for a plumber. The general minimum wage for San Francisco is $10.24 an hour.

To put that in concrete perspective, here’s one way a scam might have gone down. Let’s say Doherty got a contract from The City that required five bricklayers, each of whom is supposed to earn a prevailing wage of $36.45 per hour. She might have paid each one $31.45 an hour — still not a bad wage — and pocketed the rest.

If the bricklayers did 200 hours of combined work, that’s $1,000 in the pocket on just one part of one job.

Doherty was arrested Thursday at her business after a cooperative effort by the the San Francisco District Attorney’s office and the California Department of Insurance.

Whether or not the case goes to trial, one nagging question is that with wage information so easily accessible to the public, how in the world could this have gone on for so long without anybody noticing?