Philadelphia, PA (WorkersCompensation.com) – Two brothers accused of setting fire to their hookah lounge in 2018 in Philadelphia’s Old City in 2018 have now been ordered to pay more than $135,000 to victims of a wage theft scheme that they allegedly devised.
The brothers, Bahaa and Imad Dawara were arrested last year on charges of torching their Chestnut Street hookah lounge to collect $750,000 from their insurance policy.
The fire destroyed millions of dollars’ worth of property and displaced hundreds. However, after four of its workers filed a class-action suit in 2018, it appears that the duo was up to may have been up to illegal behavior even before the fire. The employees alleged that the owners had required them to work for tips alone then falsified their tax records, so it appeared that they were paying out legal wages.
Amal Ibrahim was one of the employees that filed the suit. She states that she was referred to the two men by a family friend who knew of a job opening. When she went to speak with the lounge owners they gave her a job, but said the starting wage was $0 per hour and, instead, her earnings would come from tips only. She agreed to the offer because she wanted to work and later learned that the proposition was illegal.
Ibrahim said her shifts were long, and she was given no breaks. The N.J. resident said she knew something was wrong when five months later, she received a 1099 tax form. The IRS document declared that the Dawara brothers had reported to the agency that they paid her around $21,00 in wages as an independent contractor.
When she confronted the owners, they told her that it was all a misunderstanding and that they would take care of it; however, three months later, they took her off the schedule and she was no longer employed.
In 2017, she received another letter from the IRS stating that she still owed taxes on her reported wages. Ibrahim confided a friend who told her what the brothers did was illegal, and then introduced her to an attorney who helped track down additional former employees who said they had been subject to the same illegal practice.
The attorney filed the class action suit in February 2018 Last week, the judge sided with the lounge workers and awarded them each between $20,000 and $48,000, for lost wages and damages.
“This is a great victory for low-wage working people whose wages were unlawfully stolen from them,” said Ryan Hancock, the labor attorney at Willig, Williams & Davidson. “My clients have incurred enormous unfair and incorrect tax liabilities that they have been struggling to pay for years.”
Ibrahim said she and other employees continued to receive payment demands from the IRS even after the wage theft suit had been filed. The judge in the case acknowledged that the brothers had conspired to deceive the federal government.