Felony charges filed against Twin Cities contractor who allegedly stiffed workers, dodged taxes

The owner of a contracting business has been charged with illegally underpaying roof and gutter workers who were hired to upgrade a St. Paul public housing project last year.

Authorities allege Jose M. Herrera, 71, of Minneapolis paid employees in cash under the table in order to circumvent contractually and legally required prevailing wage requirements for the taxpayer-funded project.

Police and prosecutors also accuse him of creating fraudulent records to avoid paying necessary worker compensation insurance and income taxes.

Herrera, owner of Bayvista Inc., faces eight felony charges in Ramsey County District Court. He is accused of wage theft, insurance fraud, underpayment of employment benefits and filing false tax returns.

During a Wednesday morning news conference, Ramsey County Attorney John Choi said human trafficking cases like those involving wage theft can be difficult to uncover because victims are often reluctant to come forward. Investigators believe at least two dozen workers’ wages were stolen, amounting to about $250,000.

St. Paul Police Chief Axel Henry said the investigation benefited from building and trades group advocates who flagged the issues to police.

Authorities continued to investigate Wednesday.

Tipsters first told police of observed unsafe worker practices at the McDonough project site. Some roofers were seen not wearing safety equipment like fall harnesses. Police also received word that workers were not being paid the right wage under the contract.

Seven employees ultimately spoke with investigators. Most said the job paid between $120 and $200 per day, according to court records. Under the contract struck with the city, the workers should have received $68.54 per hour for roofing and $83.74 per hour for gutter work.

Some employees claimed Herrera instructed them to lie if anyone asked how much money they made on the job, according to court papers filed Wednesday.

Along with stealing wages, authorities allege Herrera fraudulently misrepresented facts about his workforce to avoid paying about $135,000 in workers’ compensation insurance.

The Department of Revenue also says Herrera failed to properly withhold payroll taxes or pay his income taxes. Herrera’s wife, Carrie Gutbrod-Herrera, 66, and son Joseph Herrera, 41, both of Minneapolis, are also accused of felony tax evasion. Court records did not list a defense attorney representing any of them as of Wednesday.

Bayvista was a subcontractor hired by Marge Magnuson Construction Co. Bayvista received more than $500,000 for its work on the McDonough Townhomes project in 2024, according to court documents.