Contractor charged with fraud for allegedly taking employees’ wages

A construction contractor has been indicted on fraud charges after allegedly taking $81,000 in wages from his employees for work done on a state developmental hospital in Costa Mesa.

Sourin Babayan, 64, of Glendale, was indicted last week on 14 felony counts of taking and receiving a portion of a worker’s wage on a public works project, 19 felony counts related to forgery and fraud, the Daily Pilot reported.

He also faces two felony counts alleging attempted fraud and seven felony counts of dissuading a potential prosecution witness, with sentencing enhancements for property damage or loss exceeding $65,000, according to the Orange County district attorney’s office and the state Department of Industrial Relations.

Babayan’s company, SBD Construction, was contracted by a firm to install fire sprinklers in several multifloor buildings for an estimated $820,000, prosecutors said. During the project, Babayan is accused of receiving money from the firm, DJM Construction, to pay his employees, but then asking the employees for some of the wages back, said Susan Kang Schroeder, chief of staff for the district attorney’s office.

Babayan allegedly threatened to terminate the employees if they did not cooperate and is accused of keeping the money for personal use. He supervised 17 employees, according to prosecutors.

After his firm was dropped by DJM, Babayan allegedly invited the employees to his house to give them their final paychecks, but instead attempted to dissuade them from serving as witnesses against him in any prosecution, prosecutors said.

SBD Construction employees contacted the Orange County district attorney earlier in the year, prompting an investigation starting in July.

The state Division of Labor Standards Enforcement also conducted an investigation and completed a civil wage and penalty assessment to help the employees get their full wages returned.

If convicted on all counts, Babayan faces up to 57 years and nine months in state prison, according to prosecutors.

Babayan is being held in lieu of $200,000 bail. His arraignment was scheduled for Oct. 18.

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Beau Nicolette writes for Times Community News.