Contracting Firms, Executives Indicted In Construction Fraud Scheme
Manhattan District Attorney Alvin Bragg has issued charges against six companies and eight individuals for participating in an alleged construction fraud scheme, his office has announced.
Bragg's office announced more than 60 counts against the group of executives, contractors and subcontractors in a Wednesday press release.
Executives at JM3 Construction, a New Jersey-based firm, as well as JACG Construction, MGS Construction and New York-based LNR Construction, face up to 25 years apiece in prison if convicted. The charges include conspiracy, insurance fraud, grand larceny, money laundering, falsifying business records, commercial bribing, scheming to defraud, and offering a false instrument for filing, per the release.
In their positions at the companies, executives Lawrence Wecker, Michael Speier, Joseph Guinta, Lisa Rossi and Marcos Pinheiro allegedly obtained contracts intended for Minority and Women Business Enterprises in New York City and Westchester County through fraudulent applications, concealing the true owners of the companies bidding on projects.
“The common factor in all of these alleged schemes is greed at all costs,” Bragg said in a statement. “When the field is rigged, law-abiding companies and legitimate MWBEs are cheated out of much-needed contracts.”
The executives allegedly tricked government entities, engaging in fraudulent acts that undermined competition, New York City Department of Investigation Commissioner Jocelyn Strauber said in a statement.
The scheme was in place from 2015 through to 2021, affecting developments in Harlem, the East Village, East New York, Brownsville, the West Bronx, the South Bronx and New Rochelle and including affordable housing developments, Crain’s New York Business reported.
JM3 Construction, along with subcontractors JACG Construction and MGS Construction, allegedly falsified business records to give the appearance of legitimate subcontractor services.
JM3’s weekly payroll included large cash payments to certain subcontractors that weren't reported to workers compensation insurance providers or to tax authorities. The companies also allegedly covered up worker injuries to avoid clients and insurers discovering the secret payroll.
City agencies defrauded by the companies included the New York City Department of Housing Preservation and Development and the New York State Department of Homes and Community Renewal, according to the release. Companies sought the appearance that M/WBE firms were providing goods and services, when JM3 was actually the provider.
"HPD is serious about protecting the integrity of our MWBE programs,” New York City Department of Housing Preservation and Development Commissioner Adolfo Carrión Jr. said in a statement. “We stand by our commitment to diversifying who the city does business with.”
