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Daily Pilot

Ex-contractor accused of defauding workers

He is indicted on numerous felony counts related to a project at a state developmental hospital in Costa Mesa.

By Beau Nicolette

7:01 PM PDT, October 9, 2013

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A former general contractor working on a state developmental hospital in Costa Mesa has been indicted on charges of defrauding his employees and taking portions of their wages — adding up to $81,000, according to the Orange County district attorney's office and the state Department of Industrial Relations.

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, two felony counts of attempted taking and receiving of a portion of a worker's wage on a public works project, 19 felony counts of recording a false and forged instrument, and seven felony counts of dissuading a potential prosecution witness, with sentencing enhancements for property damage or loss exceeding $65,000, the news release said.

Babayan's company, SBD Construction, was contracted by DJM construction — the company that was awarded the hospital contract by the state of California — to install fire sprinklers in several multi-floor buildings for an estimated $820,000, the statement said.

The district attorney's office has not released the name of the hospital, said Chief of Staff Susan Kang Schroeder. The only developmental hospital in Costa Mesa is the Fairview Developmental Center on Harbor Boulevard, according to the California Department of Developmental Service's website.

During the project, Babayan is accused of receiving money from DJM to pay his employees, writing the employees a check for the correct amount and then asking for some of the wages back, Schroeder said. Babayan allegedly threatened to terminate the employees if they did not cooperate and is accused of keeping the money for personal use, according to the statement. He allegedly supervised 17 employees, the release said.

Babayan allegedly resubmitted the contract to DJM in July and asked for $2.3 million to finish the project. DJM let his company go.

He invited the employees to his house to give them their final paychecks but instead allegedly attempted to dissuade them from serving as witnesses against him in any prosecution, the statement said.

SBD Construction employees contacted the district attorney earlier in the year, and the indictment is the result of an investigation that office began in July, according to the release.

The Division of Labor Standards Enforcement from the Department of Industrial Relations 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 the release

Babayan is being held on $200,000 bail and must prove the money is from a legal and legitimate source before posting bond, the release said.

His scheduled arraignment was moved to Oct. 18.