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Upper Crust accused of scheming on pay

Affidavit from CFO claims checks forged, pay slashed

Upper Crust has repeatedly denied accusations for the past several years that it rescinded overtime compensation ordered by the labor agency.

Globe Staff/File

Upper Crust has repeatedly denied accusations for the past several years that it rescinded overtime compensation ordered by the labor agency.

After being ordered by the government to pay employees nearly $350,000 in overtime, executives at Upper Crust devised a scheme to wrest the money back, including cashing forged checks and slashing workers’ wages, according to the pizza chain’s former chief financial officer.

Upper Crust founder Jordan Tobins “yelled and screamed about the investigation” after the US Department of Labor informed the Boston chain it owed money to more than 100 employees, David Marcus said in an affidavit filed on Friday in Suffolk Superior Court in a lawsuit brought by former workers over back pay.

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“Among other things, Mr. Tobins said words to the effect of ‘This is my company’ and ‘The employees are not going to take my money,’ ” Marcus, who worked at Upper Crust until last summer, said in court records.

Marcus’s testimony is at odds with what Upper Crust has maintained about its employment practices. The company has repeatedly denied accusations for the past several years that it rescinded overtime compensation ordered by the labor agency.

And it is a reversal from what Marcus said under oath last year, when he still worked as chief financial officer and claimed there was “never” any discussion about having employees pay back the money.

These new allegations may complicate an ongoing Labor Department investigation into the matter and the former staffers’ suit. The troubles at Upper Crust, which won praise from area foodies and corporate titans like Jack Welch, also highlight the treatment of immigrants who provide cheap labor for businesses in the service economy.

Upper Crust’s sales and high growth depended on a steady flow of illegal laborers from the impoverished village of Marilac in southeastern Brazil, according to a Globe investigation published in 2010.

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Their jobs helped inject money and hope into the town, but the relationship soured over time, employees said, because the restaurant’s management began routinely exploiting the Brazilian workers by underpaying them for long work weeks while the owners indulged in personal luxuries.

Marcus’s about-face comes in the middle of a fierce battle for control of the gourmet pizza empire between Tobins and co-owners Joshua Huggard and Brendan Higgins. The pair recently sued Tobins, accusing him of charging the company more than $750,000 in personal expenses, including the purchase of a plane, and placed the founder on administrative leave in March.

David Berman, Tobins’s lawyer, denied Marcus’s allegations in his new affidavit and said the chief financial officer was the sole liaison between Upper Crust and the labor agency.

“After Jordan’s first brush with the DOL, the last thing he wanted was another brush. He wasn’t going to do anything to bring back the DOL or a lawsuit,” Berman said.

Franklin Levy, who is representing Huggard and Higgins, said Marcus’s statements are “completely contrary to a sworn deposition that was taken of him. Apparently one person has two versions of the truth.”

Levy also noted that the former Upper Crust workers are no longer opposing Marcus’s motion to dismiss the charges against him in the civil lawsuit.

Marcus’s attorney declined to comment.

The former executive left the company on his own, his attorney has said. Berman said Marcus abruptly resigned last summer after being visited by federal officials at his home.

The Department of Labor launched an investigation into Upper Crust in 2009 after several immigrant employees took their complaints about working conditions to the agency.

Later that year, it ordered the pizza chain to pay nearly $350,000 to about 120 employees for uncompensated overtime.

Several former employees have filed a civil lawsuit seeking class-action status that claims Upper Crust management, after making the lump restitution payments for overtime, told workers they would have to pay it back if they wanted to keep their jobs. There is a hearing set for Tuesday to schedule a trial date.

“Upper Crust plotted and carried out an illegal scheme to recoup back wages that the DOL ordered it to pay its workers,” said Shannon Liss-Riordan, an attorney representing the former employees.

“This scheme has been confirmed now by three managers of Upper Crust. We are hopeful this evidence will bring us closer to a resolution of the case, so that we can get the workers back their money, as well as compensation for the workers who lost their jobs because they didn’t go along with the scheme.”

Upper Crust co-owners allegedly decided to recover the money they were supposed to pay employees by turning the hourly workers into “managers” and putting them on salaries at a reduced rate, according to the affidavit filed by Marcus and previous interviews with former employees and other managers.

Tobins told senior managers that employees who did not agree to this arrangement would be fired, Marcus said in court records.

Tobins also instructed one manager, Luciano Botelho, to endorse and cash checks for workers who were no longer in the country and return that money to the business, Marcus said.

Botelho declined to comment.

Berman, Tobins’s lawyer, said Botelho told his client that some employees in Brazil were happy with their experience at Upper Crust and did not want the money so Botelho returned the cash from the checks to Marcus. Berman said he is not sure what happened to the money that was given to Marcus.

“I informed Upper Crust’s owners that the company could not recoup the DOL payments from its employees. As for the money that had been recouped by Mr. Botelho from the checks he cashed for the employees who had returned to Brazil, this cash was returned to Upper Crust, and new checks were issued for these employees,” Marcus said in the affidavit. “However the payments that were recouped from employees by Upper Crust through the reduced salary arrangement were never paid back to employees.”

Jenn Abelson can be reached at abelson@globe.com.

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