Bloomberg, Turner Construction offices raided as officials investigate $100M fraud

State officials raided the offices of Bloomberg L.P. and Turner Construction as part of a larger investigation into a suspected $100 million worth of construction fraud.

Bloomberg may have overpaid Turner $1 million for interior work at Bloomberg’s office, including its headquarters at 731 Lexington, the New York Times reported. Investigators believe subcontractors, including Queens-based Jonathan Metal & Glass, paid rogue Turner and Bloomberg executives to secure work at the financial news and information company’s offices. The Turner and Bloomberg executives, in return, inflated the cost of the contracts.

No arrests have yet been made, but Bloomberg’s global head of construction, Anthony Guzzone, and another executive have been fired. Guzzone denies any wrongdoing. Industry executives told the Times that the raids are part of a larger investigation into other contractors and victims involving up to $100 million in fraud.

Last year, another subcontractor Nastasi & Associates filed a lawsuit against Bloomberg, alleging that the company engaged in a similar scheme with New Jersey-based electrical subcontractor, Litespeed Electric. Nastasi claimed Litespeed embezzled more than $100 million from Bloomberg. Investigators raided Litespeed’s offices.

“Years ago, New York’s construction industry was plagued by the mob,” Rod Leith, a longtime investigator and a former assistant inspector general at the School Construction Authority, told the Times. “Today, a handful of private contractors have made it a way of business to cheat, bribe and corrupt a whole sector known as the interiors industry.”[NYT] — Kathryn Brenzel