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Oct. 12, 2011

Upper Crust to face federal review

Pizzeria testimony is set; grand jury to hear abuse allegations

The Beacon Hill location of The Upper Crust Pizzeria.

Dina Rudick/Globe Staff/File

The Beacon Hill location of The Upper Crust Pizzeria.

A federal grand jury is scheduled to hear testimony this week about the alleged exploitation of immigrant workers at Upper Crust Pizzeria, according to several sources with direct knowledge of the inquiry.

Earlier this year, the Globe reported that at least two federal agencies, the Department of Labor and Immigration and Customs Enforcement, were investigating the Boston-based pizza chain.

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The labor department is looking into accusations that Upper Crust rescinded thousands of dollars in back overtime payments the agency required the company to make to employees in 2009. Immigration officials have been examining whether Upper Crust harbored and exploited illegal immigrant workers.

It is not clear what charges could be considered by the grand jury convened by US Attorney Carmen Ortiz.

Christina Diorio-Sterling, a spokeswoman for the US Attorney’s office, said the agency does not confirm or deny the existence of an investigation.

Upper Crust has repeatedly denied allegations of wrongdoing.

“The Upper Crust for some time has been dealing with the Department of Labor. It’s been an ongoing process,’’ company spokesman George Regan said yesterday. “Beyond that I have no further comment.’’

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Shannon Liss-Riordan, a Boston lawyer who represents four former Upper Crust workers in a civil lawsuit filed against the company last year, said: “I’m aware there is a criminal investigation proceeding and the US Attorney’s office is planning to pursue criminal charges.’’

The plaintiffs in the civil lawsuit - for which they are seeking class action status in Suffolk Superior Court - allege that Upper Crust and its founder, Jordan Tobins, routinely took advantage of Brazilian workers by underpaying them for long work weeks.

The popular pizza chain depended on low-paid laborers from Marilac, a small town in Brazil, to expand Upper Crust to more than 18 restaurants over the past decade, according to current and former workers and store managers. Employees eventually contacted the Department of Labor about the company’s wage practices, and the agency two years ago ordered Upper Crust to pay $341,000 to more than 100 workers for uncompensated overtime.

In the civil suit, two former cooks say they were fired last year after complaining that Upper Crust deducted thousands of dollars from their checks to recoup the overtime payments.

The increased federal scrutiny follows Upper Crust’s efforts to obtain new funding from potential investors, including Aaron D. Spencer, who ran Uno Chicago Grill until the mid-1990s, as well as a New York investment firm, according to a person who has had discussions with Upper Crust officials about the matter.

“I am sure that my name along with many others were considered as a potential investor,’’ Spencer said. “But I have no interest in purchasing or making an investment in Upper Crust.’’

Upper Crust acknowledged it is looking for money to expand the business and open stores.

“Obviously, we’re always looking to expand,’’ Regan said. “To expand you need more cash.’’

Upper Crust’s longtime chief financial officer, David Marcus, left the company during the summer, along with Luciano Botelho, one of the head kitchen managers. Botelho helped recruit dozens of workers from his hometown of Marilac.

Regan said Botelho left on his own accord, but would not discuss the specifics of Marcus’s departure.

“The company was going in a new direction,’’ Regan said. “David did a very good job at the time, but now we are going in a different spot.’’

Marcus declined to comment.

Jenn Abelson can be reached at abelson@globe.com. Follow her on Twitter @jennabelson.

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