Fourteen individuals who had worked for Bloomberg LP, Turner Construction Company and a group of subcontractors have indicted in a construction fraud scheme which the Manhattan District Attorney says cost $15 million in over-charges.
The charges relate to interior construction at Bloomberg-owned properties at 120 Park Ave. and 919 Third Ave.
DA Cyrus R. Vance, Jr., said former Bloomberg LP executives Anthony Guzzone, head of global construction, and construction manager Michael Campala had conspired with former Turner executives Ronald Olson, vice-president and account executive, and project superintendent Vito Nigro to steal from Bloomberg LP through inflated subcontractor bids, fictitious work orders and change orders, and misappropriation of unused subcontractor allowance funds.
Meanwhile, various subcontracting company owners, executives, and vendors have also been charged with furthering the conspiracy by paying commercial bribes, engaging in bid-rigging, falsifying business records, and laundering the criminal proceeds of the schemes.
The 14 individuals and three corporations were charged in two New York Supreme Court indictments with Conspiracy in the Fourth Degree, as well as various counts of Grand Larceny in the First and Second Degrees, Money Laundering in the First and Second Degrees, Commercial Bribing in the First Degree, among other charges.
“New York’s sky-high construction costs are driven not only by market demand, but by pay-to-play industry corruption that makes it impossible for honest companies to compete,” Vance said in a statement.
“Thanks to the unique expertise of prosecutors in my Office’s Rackets Bureau, as well as our partners in the New York State Police, this massive, years-long kickback scheme has come to an end. Today’s indictments and guilty pleas demonstrate that if you are engaging in organized crime that blocks fair competition in Manhattan, our prosecutors will find you, turn over every stone, and shut you down. This is exactly the type of the case that our Rackets Bureau was created a hundred years ago to bring.”
The indictments are the result of a joint, long-term investigation into fraud in the interior construction industry by the Manhattan D.A.’s Rackets Bureau and the New York State Police.
As charged in the indictments, the conspiracy centered on interior construction work at two Bloomberg LP offices. Inside information on highly prized contracts was passed to subcontractors to help them secure bids for lucrative interior construction jobs. As part of the extensive and complex conspiracy, the defendants filed falsified documents including phony invoices and purchase orders to inflate their budgets, as well as falsified applications for status as a Women’s Business Enterprise to help secure bids. In exchange for help securing contracts, subcontractors provided the former Bloomberg and Turner executives with cash bribes and incentives including vacations and home renovations, the DA asserted.
The indicted subcontractors include:
- Litespeed Electric, Inc. and president Donna Fleming, executive-vice-president Robert Fleming, operations director Louis Squillante, chief financial officer Mehul (Mike) Changani and senior vice-president Thomas Conte;
- Cooling Guard Mechanical Corp. and president Michael Carrone;
- Hugh O’Kane Electric Inc., and president Hugh R. O’Kane; as well as former Manhattan branch manager Rafael Betancourt and former sales manager Angel Ocasio of Turtle & Hughes.
In addition to the defendants indicted on Dec. 11, more than a dozen individuals and corporations have entered guilty pleas so far, paying approximately $5.5 million in restitution.
Vance thanked Bloomberg LP and Turner Construction for their assistance. The businesses have not been charged as the alleged conspiracy was conducted by “rogue” senior employees and subcontractors,