The Real Deal New York

Plaza Construction to pay $9.2M for overbilling clients

Projects included Federal Reserve Bank and Brooklyn Navy Yard

October 14, 2016 11:16AM

Richard Wood

Richard Wood

Manhattan-based Plaza Construction, one of the country’s largest construction companies, has agreed to pay $9.2 million in restitution and penalties for defrauding clients for more than a decade on projects that included the Brooklyn Navy Yard, New York University, the Bronx Terminal Market and the Federal Reserve Bank.

Between 1999 and 2012, Plaza inflated costs, charged clients for unworked hours, and added hidden surcharges to clients’ bills to offset administrative costs, Brooklyn U.S. Attorney Robert Capers said Thursday.

The feds agreed not to prosecute Plaza if the company shows its reforming its practices within two years. Plaza will pay $2.2 million in restitution to clients, a $5.6 million penalty and fork over an additional $1.3 million to the government over a two-year period.

A spokesperson for the construction firm told the New York Daily News that it was accepting responsibility for “inappropriate past practices.”

In 2014, China Construction America completed its purchase of Plaza Construction from real estate development firm Fisher Brothers.

Plaza, led by CEO Richard Wood, has been under investigation since 2012. It’s just the latest firm that’s been targeted by federal authorities for fraud allegations. In 2012, Lend Lease agreed to pay $56 million to settle charges it overbilled clients on Citi Field and Grand Central Station. Last year, Tishman Construction agreed to pay $20 million in restitution and penalties for overcharging the government on labor costs for the World Trade Center and also the owners of the Plaza Hotel. [NYDN]Chava Gourarie