A group of contractors working on the I-81 project allege in a lawsuit that one of its member companies failed to pay about $2.5 million it received from them to pay for labor costs and employee benefits.
In a lawsuit dated Monday in state Supreme Court in Onondaga County, Salt City Constructors (SCC) accuse the Schoharie County-based Lancaster Development Inc. (LDI) and its co-owners, Mark Galasso and Martin Galasso Jr., of not remitting funding for employees to the Empire State Highway Contractors Association (ESHCA) in the summer of 2025 and over the last seven months.
The millions were paid to Lancaster Development, a subcontractor, by SCC, which also includes D.A. Collins Construction Co., Cold Spring Construction Co. and Tully Construction Co., for employee benefits related to work on the I-81 Viaduct Project in Syracuse, according to the suit.
It also states Lancaster Development submitted false certified payroll records to the state Labor and Transportation departments saying they were paid.
“Mark Galasso and Martin Galasso, Jr. admitted at a recorded meeting that LDI had been filing false claims for seven months and had concealed the same from SCC including from SCC’s members,” the suit states.
ESHCA notified one of the construction companies in April that Lancaster Development was behind in its payments, which led members to confront the Mark and Martin Galasso, leading LDI to make its payment owed to ESHCA in May, the suit says.
SCC says the “fraudulent scheme” has harmed its businesses and reputations, causing it to incur significant costs related to investigations and more. It seeks compensatory damages, restitution and an accounting of all funds for work done on the project.
Asked about the suit, Lancaster Development responded with a written statement, calling it wholly without merit and unauthorized under an SCC operating agreement, which the company says states that any legal action requires the consent of all partners.
It says the suit is an effort by Collins and Cold Spring to force the company out of SCC and into a buyout of its ownership interest with Tully Construction, operating together as L&T Construction.
“LDI is current, benefits were never interrupted, and employees remained fully protected. Moreover, LDI self-reported these delays to the New York Department of Labor and New York Department of Transportation well before this lawsuit was filed. Rather than working toward a solution, Collins and Cold Spring used this now-cured issue as a pretext to claim default, strip L&T of its management role, and attempt to force an unfair buyout all while threatening baseless regulatory complaints,” the statement says.