Federal investigators say four Detroit-area coney island restaurants ran payroll off two sets of timecards for the same workers. One set counted the first 40 hours of the week; the other tracked everything past 40, the hours federal law prices at time and a half. That second set was regularly destroyed, investigators allege, but the case did not disappear with the paper. Under a federal consent judgment announced by the U.S. Department of Labor at the end of July, well over a hundred employees of the four restaurants are owed more than half a million dollars in overtime wages and damages.
The two-timecard system investigators described
Investigators with the department’s Wage and Hour Division alleged that the four Leo’s Coney Island franchises and their owner, Kiriakos Vlahadamis, maintained two sets of timecards: one to record regular hours worked up to 40 per week, another to track any overtime hours beyond that. The overtime cards, investigators alleged, were regularly destroyed. Workers, the department’s case alleged, were paid straight-time rates for all hours worked, even when the law required time and one-half for the hours past 40.
The restaurants sit across the Detroit metro area, in Clarkston, Dearborn, Livonia, and Sterling Heights. The department announced the outcome on July 30, 2026; the consent judgment resolving its case had been entered on May 26, 2026, in the U.S. District Court for the Eastern District of Michigan.
The department’s release also pointed workers to its free timesheet app for iOS and Android, a plain tool for keeping your own record of hours and pay. In a case where investigators say the official records were destroyed, an employee’s own log is not paranoia. It is the backup copy of the truth.
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$515,857 across 143 workers, with penalties stacked on top
The judgment requires Vlahadamis and the four franchise companies — Sterling Ponds LLC, doing business as Leo’s Coney Island #61; Clarkston Restaurant Inc., as Leo’s #22; Dearborn Plaza Coney Island Inc., as Leo’s #41; and Stass Restaurant Inc., as Leo’s #38 — to pay 143 employees $515,857 in overtime wages and damages. Averaged out, that is roughly $3,600 per worker: real money for kitchen and counter staff who put in the extra hours in the first place.
The order does not stop at back pay. The defendants must also pay $73,784 in penalties. Penalties work differently from wages: they go to the government rather than the workers, and they exist to make underpaying staff more expensive than following the law.
A 2018 court order, a contempt petition, and $10,000 in attorney fees
This was a return visit. The defendants paid $10,000 in attorney fees to resolve a contempt petition alleging that Vlahadamis and Sterling Ponds LLC violated a 2018 consent judgment that already required them to comply with the Fair Labor Standards Act. Read plainly, the government says the operator was under a standing court order to follow federal wage law during the years the two-timecard system allegedly ran.
A consent judgment is an agreed resolution — the defendants consent to its entry rather than litigating to a verdict. But disobeying one carries its own price, which is what the contempt petition was about. The department went back to court not only over unpaid overtime but over the earlier order itself.
Time and a half after 40: the rule at the center of the case
The Fair Labor Standards Act requires overtime at not less than time and one-half an employee’s regular rate of pay for all hours worked over 40 in a workweek. The regular rate is not whatever a boss says it is. Under the Labor Department’s guidance, it is computed from actual facts — total workweek pay divided by total hours actually worked — and it cannot be circumvented by agreement. That is why timekeeping records carry so much weight in wage cases, and why the alleged destruction of the overtime cards sat at the center of this one.
Where recovered wages wait for workers who have moved on
Wage cases often end years after the workers involved have changed jobs, moved away, or lost touch. When the Wage and Hour Division recovers back pay and cannot find the person it belongs to, it holds the money for three years while it keeps searching, then is required to send it to the U.S. Treasury. The division’s Workers Owed Wages tool lets anyone search by employer name, confirm whether recovered wages are being held under their name, and file a claim; the division says it processes a completed claim form in roughly six weeks.
Anyone with questions about their own paychecks, in a restaurant or anywhere else, can call the division’s toll-free helpline at 866-4US-WAGE. For the 143 people covered by this judgment, though, the arithmetic is already done and entered on a federal docket: the Labor Department’s July 30 announcement lists the recovery to the dollar, along with the four storefronts it came from.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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