Statement from Benchmark Builders regarding indictments

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Benchmark Builders provided the following statement to New York Construction News today (June 16):

Here’s a statement issued from Benchmark Builders in response to the indictment charges. Executives there were the whistleblowers who alerted the Manhattan DA’s office to the alleged crimes committed by FTE Networks.

“Today’s indictments are the culmination of the difficult decision we made late in 2018 to protect our subcontractors and clients when we contacted the Manhattan District Attorney about the improper use of trust fund money. We invested our own personal resources into the business to protect the subcontractors and their workers and separated ourselves from FTE almost 2 years ago. Not a single subcontractor or client was impacted by these events and not a single worker missed a paycheck. The construction industry in this city can be a tough business, but we have always put integrity first and that’s what lead to today’s events.  We are happy to have this behind us and will work with renewed focus on servicing our customers.  We congratulate the District Attorney and his staff, along with the federal prosecutors, for their dogged work over the last several years.”

Further background information:

  • In 2017 FTE (then listed on the New York Stock Exchange) acquired Benchmark as a wholly owned subsidiary.
  • According to court documents and testimony, in early 2018, Benchmark executives learned that FTE was using Benchmark’s operating accounts to secure loans from a variety of third-party lenders.
  • “Benchmark executives instructed Palleschi and Lethem that Benchmark’s operating accounts contained client ‘trust assets’ – funds only to be used to pay for expenses relating to its clients’ construction projects – and that it was a crime under New York State law for FTE to use them for any purpose.”
  • “Despite this warning, [the defendants] continued to direct Benchmark to transfer significant sums of cash to FTE accounts. In response, a Benchmark executive issued a formal letter to the FTE Board of Directors in August 2018, outlining the specifics of the New York State Lien Law and reiterating its requirements that monies being held for Benchmark’s clients were considered ‘trust assets’ and that it was illegal to take these funds for any purpose unrelated to their respective projects.”

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