Peter Workum lives in a million-dollar Paradise Valley home. He’s a member of the Aluminos kart racing team, according to the company’s website .
And, according to public records reviewed by the ABC15 Investigators, Workum is also connected to companies that own six ultralight, experimental and aerobatic airplanes and eight motocross dirt bikes.
But, the ABC15 Investigators found that some of Workum’s wealth may have come at the expense of his workers.
“He misled us,” said construction worker Ivan Lopez. “Kept telling us that he was going to pay us, to wait one more week, one more week.”
Lopez and three other workers who agreed to speak with ABC15, worked for Empire Plastering and Empire Rentals. Both companies are tied to Workum.
“When we came to work, the company was closed,” Lopez said.
State Department of Labor records show 11 workers filed unpaid wage claims against the two companies totaling more than $16,000. But company sources who asked not to be named tell ABC15 that many more workers weren’t paid.
On June 10, 2011 Empire Plastering, LLC and Empire Plastering of Tucson, LLC filed for involuntary bankruptcy, according to court records. On or before the day of that filing, company sources say the doors were closed, leaving some workers unpaid.
“We did not know what to do, we were desperate,” said Jose Canchola. He is the sole breadwinner for his wife and children and said he worked for the company for at least three years.
“We even had to leave our house,” Canchola said, because he couldn’t afford to pay for rent.
“It is way too easy for employers to get away with not paying their workers,” according to Cristina Sanidad, Director of Operations with the Arizona Interfaith Alliance for Worker Justice in Phoenix.
She says similar stories play out every day in every state. It happens to documented and undocumented workers alike and to workers from every industry.
Sanidad said she has documented more than $1 million in unpaid wages to Phoenix workers in the last three years. “But this problem is so much larger than that,” she said.
Nationally, it’s estimated that tens of millions of dollars are stolen from workers each week when their employers refuse to pay them, according to a study by the University of Chicago.
And in Arizona, there’s not much the state can do to help you fight back.
“I would say the laws are weak,” Sanidad said, “but the even greater crime here is that they unenforced.”
The Arizona Department of Labor decides whether an employee is owed money. But, it can’t force a business to pay.
When it comes to unpaid wage claims, Arizona Department of Labor Director Randall Maruca admits there’s only so much the state can do.
“I don’t have the ability assess a civil penalty for failure to pay those wages,” he said.
The department is limited by statute that allows it only to seek a judgment from the court and not actually collect the money. That part is left up to the employee.
“So it is challenging sometimes to collect these debts,” Maruca said.
There are no penalties the state can level against a business that doesn’t pay its employees on time.
“There’s no follow-up, there’s no investigation,” Sanidad said, “they’re not making sure that employers become compliant.”
For the Empire employees who filed unpaid wage complaints, the state could do little to help.
Most of the claims that were made after Empire shut down were found in favor of the employer when those workers stopped responding to the state’s requests for more information. Sanidad said those workers decided to turn to the Federal Department of Labor.
While the agency wouldn’t comment, the ABC15 Investigators confirmed with the Federal Department of Labor and multiple company sources that it is investigating this case.
Gaming the System?
“To me, there’s only one plausible explanation as to why this has been orchestrated the way it’s been orchestrated,” according to Tom Salerno, an attorney with Squire Sanders in Phoenix. “Someone’s gaming the system.”
We showed Salerno court records of four businesses Peter Workum owned or has an interest in, including Empire Plastering and Empire Plastering of Tucson.
Records show three people forced both companies into involuntary bankruptcy. That type of bankruptcy is atypical, Salerno said.
Involuntary bankruptcy is usually filed by motivated creditors who are trying to get their money , according to Salerno.
But, in this case, The ABC15 Investigators uncovered the petitioning creditors in these involuntary bankruptcies are actually Workum’s colleagues. State records show, they are managing members of several other companies tied to Workum.
Instead of pushing the courts for action in these cases, these creditors did nothing – until the court pushed them to.
“The creditors put it in, the debtor said nothing – and everyone just went on radio silence,” Salerno said after looking over the records. “They’re using the bankruptcy laws to park a case and hope that no activity takes place on that