Princess Diner Owner, Manager Plead Guilty To Stealing Wages From Workers

The owner and manager of the Princess Diner in Southampton pleaded guilty last week to repeatedly failing to pay their restaurant workers and scheming to defraud them by continually lying about when they could expect to receive compensation.

New York State Attorney General Eric T. Schneiderman on Friday announced the guilty pleas of Princess Diner owner Richard Bivona and manager John Kalogeras, and the corporation RJT Food & Restaurant LLC, doing business as Southampton Princess Diner.

Together, the two stole a combined total of more than $132,000 from 23 workers, according to authorities.

Between August and December 2016, workers were not paid their hourly wages, which often included overtime hours, on a weekly basis or at all. Employees who received cash tips lived off those cash tips exclusively, since Mr. Bivona withheld most of their credit card tips or paid them only a partial amount several weeks later.

Both Mr. Bivona and Mr. Kalogeras made repeated promises to the workers that payment was imminent, but many either never received any money or received only sporadic payment after waiting for weeks to be paid, according to the release. Employees continued to work at the diner in the hopes of eventually getting paid by Mr. Bivona as promised, but eventually quit when they did not receive any compensation after months of promises, they charged.

Mr. Bivona pleaded guilty in Suffolk County Supreme Court on Friday to a charge of scheme to defraud, a class E felony, and failure to pay wages, an unclassified misdemeanor. At the time of his plea, the court informed Mr. Bivona that he would be sentenced to a jail term of no more than six months at his sentencing on June 15.

Mr. Kalogeras pleaded guilty to failure to pay wages, and the court indicated that he would be given a conditional discharge.

Lastly, the corporation RJT Food & Restaurant LLC pleaded guilty to scheme to defraud and failure to secure workers’ compensation coverage, a class E felony.

The plea mandates that the defendants pay a total of $132,011.11 in restitution to their former workers—including $88,428.11 in unpaid wages to 15 employees for incidents that took place between August and December 2016, and $43,583.00 to eight other workers for incidents that took place between January 2017 and February 2018.

“Employees deserve fair pay for a fair day’s work,” Mr. Schneiderman said in a press release. “Companies that scheme to exploit their employees and stiff them of the wages they earned should take note: We will take you to court to win back workers’ hard-earned money.”

Bob Schalk of Schalk, Ciaccio and Kahn, a Mineola-based law firm, represented Mr. Kalogeras and said on Monday that he was “pleased with the outcome” of the proceedings, which will not result in any jail time for Mr. Kalogeras.

He reiterated what he had said in September when the indictments were handed down: that Mr. Kalogeras, whose family formerly owned the diner, was working in only a managerial capacity at the time, and thus “was not in charge of payroll, per se.”

“My client and his family were affiliated with the diner for many years and were upset about what transpired,” Mr. Schalk said. “But [Mr. Kalogeras] took responsibility for any wrongdoing that he was affiliated with, and we’re happy that there was no jail or probation attached to the sentence. We’ll be honoring our part of the agreed upon plea.”

Mr. Schalk declined to say whether Mr. Kalogeras knew the money was being withheld from the workers.

John Carman of Carman, Callahan and Ingham LLP, a law firm based in Garden City, represented Mr. Bivona. Back in September, when Mr. Bivona was indicted, Mr. Carman said his client did not yet own the diner when the wages were being withheld from workers.

But on Monday, he said that Mr. Bivona acknowledged that he was responsible for paying the workers.

“Like many people who venture into business, Richard Bivona was confronted with a series of unexpected challenges when he bought the Princess Diner,” Mr. Carman said. “Faced with the loss of his entire, substantial investment, Mr. Bivona tried desperately to transition the diner to new ownership.

“He failed in that regard, and in the chaos that ensued, poor decisions about the operation of the business were made,” the attorney continued. “His plea and agreement to pay back wages reflects his acknowledgment that it was ultimately his responsibility to make sure that the workers were paid.”

The diner is currently closed, and it was not immediately clear if it would open again or if it is for sale. It also was not immediately clear when it closed for business.

The guilty pleas were welcome news for Martha Maffei, executive director of SEPA Mujer, a local grassroots Latina immigrant women’s rights organization based in Islandia, with a local chapter in Hampton Bays. She worked with local law enforcement agencies to bring the diner owners to justice.

“I’m very happy,” Ms. Maffei said. “They really put all their resources together to help the people who have been victimized for a long time, and they finally found justice. I feel like this is the beginning—it’s a precedent. We have to highlight how this is not acceptable. I think this is a strong message.”

She also pointed out that she was happy with the work the multiple agencies put into the case, and was particularly thankful for the work of Southampton Town Police Detective Kevin Gwinn.

Ms. Maffei added that SEPA Mujer is trying to increase its efforts and resources to help workers from the Latino community know and understand their rights, and added that her organization has seen an increase in calls and complaints of a similar nature since the story about the Princess Diner workers came to light. “We want to have the capacity and structure to guide people in the community who are victims of these kinds of crimes,” she said.

While the guilty pleas were a victory for the workers, Ms. Maffei pointed out that it is not a completely rosy picture. She said that while many workers she reached expressed delighted shock that the guilty pleas were secured, many also said they are still fearful of reprisals from their former employers, and are also worried that the money they’re owed still might not end up in their hands.

Despite that, Ms. Maffei hopes the outcome provides an impetus for other workers in similar situations to speak up, and she said in any of those cases, SEPA Mujer is eager to help.

“Anyone can reach out to us if they have a similar situation or complaint,” she said. “We will be the resource they need, and all of the information is confidential. This is an example of how a community can work together.”

Mr. Bivona took over the diner from Mr. Kalogeras in August 2016, but kept Mr. Kalogeras on as the manager to run its day-to-day operations. Restaurant employees—including cooks, dishwashers, bussers, and servers—many of whom had previously worked for the diner for more than 10 years, continued to work under Mr. Bivona’s stewardship.

Together, the defendants cheated 15 employees out of $88,428.11 in wages, according to the charges. Separately, Mr. Bivona cheated another eight employees out of $43,583.00 by failing to pay them and reimburse them for restaurant expenses between January 2017 and February 2018, according to the state.

The investigation was a team effort that included investigators with the attorney’s general’s office, the State Department of Labor, the State Workers’ Compensation Board, the Suffolk County district attorney’s office and Southampton Town Police, specifically Det. Gwinn, Detective Sergeant Lisa Costa and Chief of Police Steven E. Skrynecki, the release from Mr. Schneiderman’s office noted.