Filipino guestworkers allege company cheated them, kept tax refunds

Filipino guestworkers allege company cheated them, kept tax refunds

Posted on March 5, 2013 at 11:05 PM

Updated Wednesday, Oct 30 at 12:12 PM

Brendan McCarthy / Eyewitness News
Email: | Twitter: @bmccarthyWWL

NEW ORLEANS -- Ferdinand Garcia was once one of hundreds of foreign guestworkers at Grand Isle Shipyard, a busy oilfield contractor in Galliano.

Now, he is part of a growing group of human trafficking victims, who say they were treated like slaves and lied to, all in violation of workplace regulations.

Watch the story

And amid our investigation into Grand Isle Shipyard and its affiliated companies, comes a new allegation. Workers say they were fooled and cheated out of their tax refunds by their employer, a subcontractor with ties to Grand Isle's executives.

Filipino guestworkers say they were forced to sign papers handing "power of attorney" over to the company. Others claim they never even signed the documents and their signatures were forged.

"They never explain to us about the paper that we need to sign in there,” said Eduardo Real, a welder. “They just told us just copy this example letter.”

At least one worker can show he wasn't even in the country on the date he supposedly signed the document. And documents, including the people involved in this operation, prompt even more questions about the company’s actions.

For months we've been investigating these companies, confirming many of these workers claims, and much more.

We went all the way to the Philippines and found a troubled system in which workers were recruited and trafficked to Louisiana machine shops and offshore oil platforms. We uncovered immigration paperwork based on lies, numerous apparent violations and more.

In the Philippines, Romeo Andrade told us of how he worked off and on at Grand Isle Shipyard for several years. In his first go-round, he was shocked at his payslip. Not only because the pay was far below what he had been promised, but also because of the Social Security number noted on the paperwork. It read: 000-00-0085.

"From 2006 until 2008 I had a lot of deductions that they made from my payslip,” he said. “And then when I came back in 2009, I had a Social Security number, which is stated on my payslip.” That number was far different.

“The truth is I didn't file social security form,” he said.

Nonetheless, Andrade said, with the paperwork by his side, that he got taxed and that federal and state deductions were taken from his paycheck

Today, he says he has no idea where his tax paperwork or refunds went.

We checked with the Social Security Administration. A spokeswoman said that Andrade's number was certainly not issued by the federal agency. She noted that the Internal Revenue Service requires employers to use Social Security numbers to report wages.

The IRS determines who gets a refund.

We tried the IRS. Spokesman Mike Dobzinski said he wanted no part of any story regarding human trafficking or tax fraud. Dobzinski said the IRS would have no comment whatsoever on the matter.

Andrade isn’t the only one speaking out. Other workers said they too had their tax refunds held by their employer. And they said they were intimidated and pressured into signing tax paperwork.

"They had us sign some papers,” Lemuel Lumanog said. “I didn't know what they were for. They told us those papers were for them, not for us. It has happened before, whether we sign a paper or not, the company just got the refund anyway."

Lumanog said he and others inquired about this.

“Their explanation is that they were the ones paying, and not us."

Eduardo Real, a former welder who currently lives in a West Bank apartment with several other former Grand Isle Shipyard workers, told a similar story.

"They just told us, just sign the paper,” he said. “They don't explain to us. They always tell us, you don't have the right to refund the taxes because you are not ones paying the taxes. "

"We keep asking them, but they said don't ask those questions because we are gonna fire you. They always telling that to us. If you complain, you get fired. You get sent home. And you never come back no more. That's the end of your career here in the United States."

We obtained documents that show Filipino guestworkers signing over their rights to D&R Resources, a Louisiana subcontractor for Grand Isle Shipyard. This power of attorney, allows D&R to withhold taxes, file tax returns on their behalf, and endorse any and all tax refund checks.

D&R has three directors -- all Filipino nationals. These men are also tied to the Filipino recruitment company that feeds employees to Grand Isle.

One of them, Randolf Malagapo, told us months ago that his company had no ties to Grand Isle. He said this from the backyard of his home, which is owned by Mark Pregeant, the CEO of Grand Isle Shipyard.

Though the notarized documents were supposedly signed and notarized on different dates in different years, the handwriting is remarkably similar. So are the people involved.

The witnesses to the signed documents are Grand Isle Shipyard employees, including Pregeant's relative.

And D&R's authorized agent on these papers is Grand Isle's accountant.

Some of the workers say these notarized documents are forged.

“I can prove it on my passport,” said Ferdinand Garcia. “Because on that day, I was in the Philippines. I was departed the United States on Fourth of July. That's why I cannot forget that day, because it was the Fourth of July of 2008."

His passport stamp shows he arrived in the Philippines on July 5, 2008. The notarized paperwork is signed July 9, 2008.

"How can they do that?” Garcia said. “How can they prove I signed those things? Those papers? I was with my family."

Mark Pregeant, the CEO of Grand Isle has refused to respond to our inquiries over the last two months. His attorney has called the human trafficking claims false. And the attorney issued a statement saying the men were not employed directly by Grand Isle, but through a Filipino recruiter and a separate Louisiana subcontractor.

But we've uncovered records that tie the company executives together and show Grand Isle actually helped create one of the groups.

Meanwhile, following our series of reports, the Philippines government has opened an investigation into whether the companies violated overseas employment laws.