Croton contractor admits to fraud

On Monday, Loretta E. Lynch, United States Attorney for the Eastern District of New York, announced that the Schiavone Construction Co. LLC will pay the United States $20 million for committing fraud while performing various public works contracts,  including the Croton Water Filtration Plant, according to a press release.

After years of planning and battles raging over where the plant would finally be placed, construction started on the Croton plant in the northeast corner of Van Cortlandt Park in 2004. It was that year that Schiavone starting working on the project for which it had two contracts, totaling  $350 million with the Department of Environmental Protection. They required that Schiavone comply with the New York State Minority and Disadvantaged Business Enterprises, which meant they were to subcontract work to minority and women-owned businesses. They said they were doing that, but they weren’t. Instead, some  the of the employees were engaged in a “scheme to defraud the DEP and MTA by submitting fraudulent utilization reports.”

“Since 1999 the IRS has been committed to its law enforcement partners in detecting and rooting out fraud in the New York metropolitan area’s construction industry,” Charles R. Pines, special agent-in-charge for the Criminal Investigation Division for the New York Office of the Internal Revenue Service, said in a press release.