Human Resources, Law, and Travel & Tourism

Hotel owner ordered to pay restitution

August 23, 2017
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A woman works at a hotel's 24-hour concierge desk. Photo via

A hotel owner in the region has been ordered to pay $150,500 to his former employees in a case involving the violation of minimum wage laws and a subsequent cover-up.

Acting U.S. Attorney Andrew Birge said yesterday that Mehul Chandubhai “Mike” Patel, of Battle Creek, was ordered to pay the sum in restitution to his former employees as the last stage of his sentence for lying to Department of Labor investigators during their probe into Patel’s violation of minimum wage laws, while he operated two hotels in Battle Creek and Coldwater.

Patel is serving a 60-day sentence imposed in U.S. District Court on May 24 for the offense.

“Putting Patel in jail for cheating his financially distressed employees was important, but so is making sure they are paid what they are owed,” Birge said. “This settlement allows them to be re-paid right away, rather than waiting months or years.”

On Feb. 2, Patel pled guilty to violating a federal statute that prohibits anyone from concealing a material fact from the federal government when obligated to disclose it. He admitted that in 2005, the DOL found him to be in violation of minimum wage laws by underpaying his hotel employees. He then signed an agreement promising to re-pay his employees.

When requested to provide proof, Patel sent the DOL checks indicating back wages had been paid. However, he concealed the fact that he required his employees to return the money to him immediately after cashing the checks.

U.S. District Judge Paul Maloney delayed imposing restitution at the sentencing hearing, advising the parties that he would decide the matter in August if they could not reach an agreement on the amount of restitution. On Aug. 18, the U.S. Attorney’s Office reached an agreement with Patel that he would immediately pay $150,500 to the DOL for disbursement to his former employees. This will result in no further action against him for back wages, either in criminal or civil court.

Birge praised the Chicago office of the DOL for its help in reaching a settlement that satisfied criminal restitution and civil damages.

Timothy VerHey, assistant U.S. attorney, prosecuted the case. The DOL, Office of Inspector General, a Homeland Security Investigations team and the Battle Creek Police Department investigated the matter.

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