Construction Execs and Subcontractors Conspired to Fraudulently Use Minority and Women-Owned Business Enterprises as Pass-Through Entities to Obtain Contracts for Affordable Housing Developments
Announcement Comes During National Construction Safety Week
Manhattan District Attorney Alvin L. Bragg, Jr., today announced a series of indictments charging eight individuals and six companies with pervasive fraud and corruption within the construction industry, including schemes that defrauded city and state agencies and affected the development of numerous affordable housing projects in New York City and the tri-state area.
“The common factor in all of these alleged schemes is greed at all costs,” said District Attorney Bragg. “When the field is rigged, law-abiding companies and legitimate MWBEs are cheated out of much-needed contracts. And when executives care more about their bottom line than their employees and the law, hard-working New Yorkers suffer. These indictments send the message that the Manhattan D.A.’s Office does not tolerate fraud in any form.”
“Insurance fraud, including workers’ compensation fraud, costs honest companies and employees tens of millions of dollars every year,” said Gaurav Vasisht, Executive Director & CEO of the New York State Insurance Fund. “We work hard to educate injured workers, companies, and the medical community on spotting and reporting fraud, and we’re grateful to D.A. Bragg and his office for indicting the bad actors in this scheme.”
The indictments were the result of a long-term investigation by the Manhattan D.A.’s Office’s Rackets Bureau, which began when investigators identified a possible criminal enterprise after observing suspicious check-cashing activity. In turn, this led to separate investigations into recipients of bribes and the alleged Minority and Women-Owned Business Enterprises (M/WBE) fraud schemes.
One indictment charges JM3 CONSTRUCTION LLC, its principal LAWRENCE WECKER, 82, MICHAEL SPEIER 46, JOSEPH GUINTA, 57, LISA ROSSI, 52, and MARCOS PINHEIRO, 65, as well as their companies (collectively referred to as the JM3 CONSTRUCTION ENTERPRISE), with Enterprise Corruption, alleging that they engaged in multiple criminal schemes to increase their business and revenues to the detriment of their workers and fair competition within the industry. This indictment charges the defendants with 60 total counts, including conspiracy, insurance fraud, grand larceny, money laundering, falsifying business records, commercial bribing, scheme to defraud and offering a false instrument for filing.