Construction firm indicted for MWBE fraud

Drywall wasn’t the only cover that one construction firm was putting up, Manhattan prosecutors said Tuesday.

On Tuesday, District Attorney Alvin Bragg announced 60 charges against eight people and six companies under the umbrella of Lawrence Wecker’s JM3 Construction Enterprises.

The counts allege a multimillion-dollar tax fraud scheme in which Wecker and his colleagues paid certified minority and women-owned businesses to bid on and win large, government-subsidized affordable housing contracts. Those firms then acted as a cover while JM3 paid undocumented and unreported workers off the books to do the projects. 

The alleged pass-through companies included LNR Construction and Eco Geek Living LLC, according to the indictment. Wecker was previously indicted on mob-related charges and convicted of tax fraud, authorities said.

Such allegations have been a longstanding problem in the effort to boost minority contractors. On some government-funded projects, developers are tasked with using MWBE-certified firms to carry out 30 percent of the work.

“When the field is rigged, law-abiding companies and legitimate MWBEs are cheated out of much-needed contracts,” Bragg said in a press release.

Prosecutors said JM3’s scheme involved properties across three boroughs and southern Westchester from 2014 to 2021. In Manhattan, they included the National Urban League at 126 West 126th Street and L+M Development Partners’ 12-story apartment building at 79 Avenue D.

In Brooklyn, JM3 stands accused of construction and insurance fraud at a 160-unit affordable housing project in Brownsville and a 15-story mixed-use building at 888 Fountain Avenue in East New York. L+M paid $25 million for the latter site in 2021.

An L+M spokesperson said, “While JM3 was engaged in preliminary discussions about potential work on the National Urban League and 888 Fountain Avenue projects, the company never had a contract to work on them, and never worked on them.”

North of the Harlem River, JM3’s alleged fraud involved a seven-story residential building at 1812 Vyse Avenue, a 435-unit apartment complex at 1520 Story Avenue and a 457,000-square-foot, mixed-use project at 14 LeCount Place in New Rochelle.

In some cases, according to prosecutors, JM3 also stiffed firms.

“Wecker and JM3 allegedly stole money meant for subcontractors by never making good on a promised payment,” Bragg said. “One newly formed company’s young executives were forced to shutter their business when JM3’s payments never came through.”

The impact of the corruption stretched from the subcontractors to their workers, as the illicit hiring tactics prevented injured employees from access to worker’s compensation via the New York State Insurance Fund.

“If somebody gets hurt, if it’s minor, take him to urgent care, say it happened at home and we’ll pay him,” Wecker, 82, allegedly said in a 2021 telephone conversation, according to the indictment.

In another instance, an employee who received 45 stitches following a workplace injury was told by JM3 to lie to health care workers about where the injury came from, Bragg said in a press conference Tuesday.

Other activity uncovered during the investigation included a scheme by MSG Construction Corp. that defrauded the insurance fund of more than $1.7 million. Workers were sent back to construction sites even after their insurance was canceled, prosecutors said.

JACG Construction LLC was charged with defrauding the fund of more than $360,000.

This is not Wecker’s first rodeo with the Manhattan D.A. In 2000, he was one of 38 people, including union leaders and mobsters, indicted in a pervasive bid-rigging and racketeering conspiracy targeting the concrete industry.

The industry was a popular target for organized crime because concrete firms have to be within about 45 minutes of construction sites, putting them within easy reach of thugs.

In 1986, Wecker was an unindicted co-conspirator in a case involving organized crime and the concrete industry. In it, one mob boss described Wecker as a “walking ATM machine” for his money laundering abilities, according to the New York Times.

In 1997, Wecker was convicted of federal tax evasion.

This story has been updated with a quote from L+M Development Partners.