NJ construction company pays $20M settlement in connection with NY projects

Skanska is under scrutiny in Manhattan
November 30, 2010 11:36AM

The Times Square subway station is one project involved in the fraud for which Schiavone Construction is paying a $20 million settlement.

Schiavone Construction Company, a firm that has been involved in some of New York’s largest infrastructure projects, agreed to pay $20 million for crimes it committed while performing $691 million in public contracts, according to the New York Times. Schiavone, a Secaucus, N.J.-based company, signed a nonprosecution agreement and consented to the payment to avoid criminal charges, after admitting yesterday to defrauding government programs by committing wire fraud and evading requirements to hire a certain percentage of minority- or women-owned subcontractors.

Sources told the Daily News that Gambino mobster Joseph Vollaro secretly taped conversations with executives who had promised the Metropolitan Transportation Authority and the Department of Environmental Protection to hire firms owned by women and minorities for projects. According to the Times, the case came to light largely through the work of an independent monitor, Toby Thacher, who was hired by the MTA to check on the projects.

The projects involved in the fraud were the city’s $2.8 billion Croton Water Treatment Plant, the $90 million rehabilitation of the Times Square subway station and $261 million in work on the South Ferry subway station. Such schemes, according to construction industry officials, are widespread at public works projects, and a similar investigation is underway in Manhattan, focusing on Skanska USA Civil Northeast, which also worked on large transportation authority projects. In addition to the $20 million payment to the United States Treasury, Schiavone will pay $1.8 million to the transportation authority’s inspector general and close to $540,000 to the city’s Department of Investigation for the costs of the nearly five-year investigation. [NYT] and [NYDN]