First person convicted of felony wage theft in Minnesota sentenced to three years probation

A painting contractor was sentenced on Friday to three years probation for stealing more than $37,000 in wages from five workers at an affordable housing development in Minneapolis.

Frederick Leon Newell was the first person ever to be convicted of felony wage theft in Minnesota in April, more than five years after state lawmakers enacted criminal penalties for wage theft. Newell was also convicted of felony theft by swindle.

Newell must also complete 200 hours of community service and pay more than $42,000 as part of the sentencing, and he may not bid on new public contracts.

“Mr. Newell was entrusted with public funds to pay his employees for their labor on a public works project. Instead, he siphoned the money they earned for himself,” Hennepin County Attorney Mary Moriarty said in a statement. “I am proud of our prosecutors’ efforts in securing the first wage theft criminal conviction in Minnesota history; it is a major step toward greater protection for workers.”

Integrated Painting Solutions was hired for painting and cleaning work in 2020 on the Redwell, an affordable apartment complex in Minneapolis.

Newell’s company received more than $320,000 for the work on the development, which required that he pay a prevailing minimum wage of $36 per hour for painters and $36.41 per hour for general laborers plus benefits because it received public funding through tax increment financing.

Newell paid his workers far less than required — from $15 to $25 per hour — and submitted falsified payroll records to cover up the underpayments. All told, Newell stole more than $35,000 in wages from five workers, with one employee underpaid by nearly $14,000 over just three months in 2020, according to the criminal conviction.

The case came to light after the workers filed complaints with the city of Minneapolis’s Civil Rights Division, with the help of the International Union of Painters and Allied Trades union.

The city investigated their claims and in June 2021 issued a violation letter to Integrated Painting Solutions. Newell signed a settlement agreement with the city to pay $43,166 in restitution but never did.

Greiner Construction, the general contractor for the Redwell, voluntarily made Newell’s workers whole beyond what they had already paid to Newell’s company.

In 2022, the previous Hennepin County attorney, Mike Freeman, filed charges against Newell after receiving a referral from the city of Minneapolis.

Last week, Moriarty announced felony wage theft and theft by swindle charges against Bishop Harding Smith, the head of the violence intervention nonprofit Minnesota Acts Now, for allegedly shorting workers $150,000 from a county contract.

Minnesota Attorney General Keith Ellison is currently prosecuting another felony wage theft case against a central Minnesota dairy farmer, accused of stealing millions in wages from hundreds of workers in a civil case that settled for $250,000 last year.