The Real Deal New York

Omni New York says supplier overbilled as part of scam with ex-employees

Company is seeking at least $1M in damages
By Kathryn Brenzel | March 13, 2018 05:40PM

Clockwise: Hunts Point Apartments, River Park Towers and Morris II Avenue Apartments

Mo Vaughn and Eugene Schneur’s Omni New York claims its long-time building materials supplier routinely inflated prices, at times marking up construction materials by as much as 66 percent.

Omni, along with its subsidiaries Reliant Realty Services and Renewal Construction, which respectively manage and renovate properties for the affordable housing developer, filed a lawsuit on Tuesday against Brooklyn-based Berkoff Supply. The complaint alleges that Berkoff schemed with two employees — one from Reliant and another from Omni — to jack up the prices for repair and renovation work at Omni’s properties.

In one instance, Berkoff charged Reliant $81.51 for each stair tread it ordered when the supplier charged others $48.95, representing a 66 percent markup, according to the lawsuit.

The scheme was discovered by a retired New York Police Department sergeant-turned Reliant employee. Without identifying he was a Reliant employee, he called Berkoff and asked for the pricing of the same items the property manager had purchased.

The complaint notes that Omni and its subsidiaries have bought supplies from Berkoff since at least 2010, ordering at least $500,000 worth of materials each year. The lawsuit doesn’t specify how much Berkoff allegedly stole, but Omni is seeking at least $1 million in damages.

Berkoff didn’t immediately return messages seeking comment. Omni declined to comment on Tuesday.

As a result of Reliant’s internal investigation, the property manager’s Ahmed Taylor and Omni’s David Rosenberg, were fired, according to the complaint. The two helped artificially inflate invoices from Berkoff and ordered more materials than were necessary for Omni’s properties, the complaint alleges. The extra materials were allegedly intended for their personal homes. Taylor also had construction items for kitchen and bathroom renovations delivered to his home on Reliant’s dime, the lawsuit states.

Contact information for Taylor and Rosenberg was not immediately available.