The offices of three interior construction subcontractors were raided this week by state troopers and detectives from the Manhattan district attorney’s office as part of an investigation into widespread corruption in the industry. The offices of P.J. Mechanical of Manhattan, Sirina Fire Protection of Long Island and Sweeney & Harkin Carpentry and Dry Wall of Queens were searched in connection with the investigation of construction contractors, which have been suspected of stealing hundreds of millions of dollars through a scheme involving false invoices for interior construction work. The three subcontractors have not been accused of any wrongdoing. There are roughly 70 companies coming under scrutiny by the district attorney’s office as part of its expanded probe into the industry, which began under former Manhattan District Attorney Robert Morgenthau and resulted in charges against the Builders Group and three of its executives in January for allegedly pocketing close to $7 million of clients’ money at five condominium and office projects. [NYT]

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The offices of three interior construction subcontractors were raided this week by state troopers and detectives from the Manhattan district attorney’s office as part of an investigation into widespread corruption in the industry. The offices of P.J. Mechanical of Manhattan, Sirina Fire Protection of Long Island and Sweeney & Harkin Carpentry and Dry Wall of Queens were searched in connection with the investigation of construction contractors, which have been suspected of stealing hundreds of millions of dollars through a scheme involving false invoices for interior construction work. The three subcontractors have not been accused of any wrongdoing. There are roughly 70 companies coming under scrutiny by the district attorney’s office as part of its expanded probe into the industry, which began under former Manhattan District Attorney Robert Morgenthau and resulted in charges against the Builders Group and three of its executives in January for allegedly pocketing close to $7 million of clients’ money at five condominium and office projects. [NYT]

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Manhattan District Attorney Robert Morgenthau and the Wagner Houses in Harlem

Long Island City contracting firm Remy Building Corporation, which was hired to perform masonry work at 13 New York City Housing Authority buildings, and its owner have been indicted for defrauding its employees out of $484,000 in wages and benefits, Manhattan District Attorney Robert Morgenthau announced today. The company and owner Richard Martinez of Bloomfield, N.J., allegedly omitted the names of 16 non-union workers from monthly payrolls in an attempt to conceal the fact that they were being paid only $18.75 per hour for their work at the Wagner Houses in Harlem, though they were entitled to $51.54, according to state labor laws. The fraud, which was said to have occurred between Aug. 1, 2008 and June 20, 2009, was discovered when officials at the local union found that the shop steward there had accepted $300 in bribes for not reporting that Remy was using non-union workers. For the most serious charge, Martinez could serve five to 15 years in prison. TRD [more]

Nineteen New York and New Jersey residents have been indicted for falsifying residence information and lying about their assets in order to cheat the government out of more than $350,000 in Medicaid benefits, Manhatan District Attorney Robert Morgenthau announced Thursday. The individuals allegedly claimed to fall under the low-income bracket necessary to receive the benefits, when in fact, many owned millions of dollars worth of New York real estate. Among those indicted were Steven Colucci, a Manhattan man who owns and leases two waterfront Hamptons properties, Diana Downing, an Upper East Side landlord who claimed to manage one of the buildings she actually owns in exchange for free rent, and Brian Bomeisler, a well-known art instructor who owns apartments in Soho and on the Lower East Side, worth at least $1 million each. Bomeisler is said to have received $37,554.53 in public health benefits between 2002 and 2008. Downing and Colucci received $38,161.84 and $16,112.68, respectively, between 2005 and 2008. TRD

Six women have been charged with faking domestic abuse cases in order to obtain government-subsidized New York apartments. The city’s subsidy program through Section 8 allows tenants to pay 30 percent of their income towards rent, while the rest is covered through federal funding. Only domestic violence victims, intimidated witnesses from criminal cases, and those referred by the city’s Administration for Children’s Services are eligible for the subsidies. Though it is unclear whether the women collaborated, similarities in their applications drew the Housing Authority to investigate further. They allegedly submitted forged police reports and court orders that they hoped would bump them ahead of thousands of others in line for the Section 8 program. Manhattan District Attorney Robert Morgenthau is prosecuting the case.

Barry Gross, project director for Hudson Waterfront Associates, has been indicted and arrested on charges of grand larceny, falsifying business records, offering a false instrument for filing, filing a false personal tax return and failure to file unincorporated business taxes, according to a press release from Manhattan District Attorney Robert Morgenthau’s office. If convicted, Gross faces upward of 20 years in prison. The case centers around the 2005 $1.76 billion sale of Riverside South Properties, a stretch of land extending from West 58th to West 72nd Street on Riverside Boulevard, once owned by Donald Trump. Hudson Waterfont Associates was a group of Hong Kong investors, according to the San Francisco Business Times. The DA office’s charges include Gross receiving a $1 million bonus to a shell corporation from Hudson Waterfront Associates, in order to evade paying taxes. TRD

Manhattan District Attorney Robert Morgenthau indicted the owners of
several New York City check-cashing companies yesterday for a
money-laundering scheme that authorities uncovered while investigating
a contaminated World Trade Center building. Rose Gill Hearn, the city’s
commissioner of investigations, said the alleged scheme was a “shell
game” in which checks related to the former Deutsche Bank building were
cashed. Riad Khalil and Neil Goldstein, owners of two of the check-cashing companies,
were slated to be arraigned yesterday on charges of falsifying business
records.
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The Manhattan District Attorney’s office is investigating
subcontractors at the World Trade Center site for paying construction
workers directly in cash, without paying taxes or making contributions
to the workers’ pension funds. The DA said the taxes and pension
payments lost could be in the millions. DA Robert Morgenthau said the
office was looking into whether the site’s general contractors, Bovis
Lend Lease and Tishman Construction, were aware of the alleged fraud. [more]

Thirteen individuals and one mortgage origination company were indicted
today in a mortgage fraud scheme involving more than $100 million,
according to a press release from the Manhattan District Attorney’s
office. Twelve other people have already pleaded guilty to felonies in
the case. The defendants include principals and employees of the
mortgage company, AFG Financial Group, bank employees, appraisers and
attorneys. The crimes took place between June 2004 and April 2009, and
the fraudulent closings took place between mid-2005 and the end of
2007, according to the press release. AFG allegedly paid people to find
distressed properties and straw buyers for them. AFG is accused of
failing to make mortgage payments on the properties, ruining the straw
buyers’ credit ratings and sending the sellers’ homes into foreclosure. TRD [more]