A trucking company owner with a history of stiffing his drivers was charged Thursday in Hennepin County with swindling dozens of employees out of their legally set wages.

Gary Bauerly, 64, of Rice, 15 miles north of St. Cloud, allegedly used intimidation and accounting tricks to pay his workers less than the prevailing wages to which they were entitled under state law, Hennepin County Attorney Mike Freeman said.

Then Bauerly pocketed the difference -- at least $52,000 from six road construction contracts involving state and local governments that his company, Watab Hauling, entered into in 2007, Freeman said.

"He systematically defrauded his employees, general contractors and the taxpayers," Freeman said, announcing the charges surrounded by labor leaders at a union hall in Minneapolis.

It was not the first time that Bauerly has been accused of trimming his employees' pay.

In 2005, a federal judge found his companies liable for minimum-wage violations. The case was settled when Bauerly promised to keep good records, pay the minimum wage and reimburse drivers for nearly $3,500 in back pay and damages.

In 2008, federal and state transportation officials investigated Bauerly for shorting payroll checks and submitting fraudulent payroll records to the government.

That investigation was launched after Watab employees told officials they weren't being paid a prevailing wage -- the hourly rate, plus benefits, that the state requires for work done on state-funded construction projects.

The state sets prevailing wages each year for different regions across Minnesota.

State officials had hoped the investigation would result in a federal indictment, said Clancy Finnegan, lead investigator for the Minnesota Department of Transportation. When that didn't happen, the state decided to handle 80 to 90 fraud allegations against Bauerly administratively, and Hennepin County assembled felony charges against him.

Watab, based in Rice and St. Cloud, is no longer in business. Bauerly was not in custody Thursday and could not be reached for comment.

The six contracts that Bauerly allegedly skimmed were road construction projects that involved the state; Hennepin, Pine, Stearns and Washington counties; and Brooklyn Center, Osseo and Plymouth.

Freeman said it was the first time such a case had been charged by his office, in part because most wage scams aren't done in such a serial and blatant fashion. Hennepin County was the contracting agent in two of the alleged scams and the site for three of them.

The charge -- theft by swindle over $35,000 -- carries a penalty of up to 20 years in prison.

According to the complaint filed Thursday, Bauerly allegedly told his office manager and employees that prevailing wages were unfair, that he couldn't afford them and that he didn't think he should have to pay them. But he continued to provide services for contractors working on state and local projects.

One of his schemes, according to the complaint, was to pay employees with two checks, one for the standard wage and another for the balance owed under the prevailing wage. "The second check was never dispersed to employees," the complaint said.

Bauerly also allegedly required his workers to deposit their prevailing wage checks in an account he controlled, under threat of taking hours away from them.

The complaint says he made drivers falsify time sheets and withheld money from their prevailing wage checks for "job expenses."

Kevin Duchschere • 612-673-4455