Failed company puts workers in a jam

MAT-SU — Cool heads are hard to come by when it comes to back wages.

Elise Graham is mad. On May 11, she was hired by King Cost Metals to collect scrap for $100 a day. She went through some preliminary training and then set to work in a junk yard off Hollywood Road.

“They said we had to take care of the taxes on our own. We were like subcontractors, but not really because we only worked for the one company,” Graham said.

She said she worked for about four days before the work started to get slow. As the right type of metal became harder and harder to find in the yard, King Cost started laying people off. Eventually, the work dried up, and the operation became idle less than two weeks after it started.

“We were supposed to be paid at the end of the pay period on the 4th (of June),” Graham said. “On the 5th, the excuses started.”

Rich Dringenberg shares Graham’s anger. He had the same arraignment of $100 a day working for King Cost. After receiving half a day of training, he worked as a cutter, chopping up the scrap when it came in. He said people were told to buy steel toe boots and heavy work gloves and submit their receipts for reimbursement.

Six days later, Dringenberg was laid off. Like Graham, he was told they would collect their checks on the 5th.

“Everybody was up there at the coffee shop where we had our meetings, and no one showed up to pay us,” Dringenberg said.

Both Graham and Dringenberg said they were told over the phone that the checks were waiting to be signed before they could be distributed. The next week when there were still no checks, King Cost told the employees a courier company would deliver the checks. Graham said she called the courier company and the tracking number was fake.

“What do you need a courier for anyway?” Dringenberg said. “Just tell me where to go, and I will pick it up.”

Graham said some of the workers went to the home of one of the partners of King Cost to demand their money. They had no luck, and she cannot get a hold of any of the partners now.

Now, after a few more unfulfilled promises, Graham has filed an official complaint with the Department of Labor.

“There’s like 30 or 40 people waiting on their checks. A lot are just kids that can’t get jobs anywhere else,” Graham said. “Now, they’re late on rent payments and car payments. I’ve got late fees on my storage unit now. I’m stuck.”

Joel Costonis, the only partner in King Cost Metals who could be reached, admits people are owed money. However, the reality of business is that you need income to pay the bills, he said, and King Cost has no income.

Costonis, who was embroiled in an ownership controversy over the now derelict Goldminer’s Hotel, said King Cost is owed money by a concrete business in Wasilla. He refused to say more because litigation is pending, but he said the company cannot pay its employees until that is settled. He said he has not made any money since February, and after the amount he personally lost in the Goldminer, he simply has no cash.

“I’ve been accused of all kinds of fraud. People are saying I’ve left the state,” Costonis said. “That’s simply not true. Joel Costonis, Steven King and Jan Lars tried to put together a company. The production level was wrong and never met. We got upside-down on the payroll, plan and simple.”

Costonis also said the workers are showing their grievance the wrong way. They came to their partner’s house armed and have personally threaten him, he said. Six cases of alcohol he had left over from the Goldminer were stolen, and only his employees knew he had it.

He said he is trying to do right by the employees and has helped some who have needed some essentials, but he cannot be held personally responsible for a failed business venture.

“If it gets to the point where DOL calls me, I will deal with that then,” Costonis said. “But now, I’m trying to deal with the concrete business to get the money.”

The DOL has received complaints and will begin a formal investigation, said wage and hour investigator Warren Petrasek. DOL gives the employer 20 days to respond, and cases can end up in small claims court if not settled first.

“But it doesn’t sound like this employer has any means,” Petrasek said. “You can’t get blood out of a turnip.”

That is little solace for the employees.

“Everybody that was working for him was eating Top Ramen,” Dringenberg said. “He had them go buy boots and gloves with the last of their money.” That’s just wrong, he said.

Graham said even more than not being able to pay, she is upset at the false pretenses she got from the beginning.

“They could at least be upfront with us,” she said. “They all said we are all family. If I had a family like that, I would eat my young.”

Contact Todd L. Disher at todd.disher@frontiersman.com or 352-2252.