DISTRICT ATTORNEY VANCE ANNOUNCES INDICTMENT OF SIX SUBCONTRACTING COMPANIES AND THEIR OWNERS IN MULTIMILLION-DOLLAR FRAUD
Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictments of six subcontracting companies and their owners for colluding with LEHR CONSTRUCTION CORPORATION (LEHR) in a multimillion dollar scheme that defrauded numerous construction clients over the past decade. See, related story.
The announcement comes one day after DA Vance announced LEHR and four executives were indicted on crimes including Enterprise Corruption, the New York State Racketeering law. GODSELL CONSTRUCTION CORPORATION and its owner ARTHUR GODSELL are charged with Grand Larceny in the Second Degree. JT ROSELLE LIGHTING, INC. and its owner JAMES ROSELLE, LIBERTY CONTRACTING CORPORATION and its owners GEORGE FOTIADIS and KEVIN FOTIADIS, PJ MECHANICAL and its owner JAMES PAPPAS, SUPERIOR ACOUSTICS, INC. and its owner KENNETH MCGUIGAN, and SWEENEY & HARKIN CARPENTRY and its owner MICHAEL HAYES are charged with Grand Larceny in the Third Degree.[1]
"The defendants in this case cheated clients out of millions of dollars, and their honest competitors out of valuable construction jobs," said District Attorney Vance. "LEHR would not have been able to operate its corrupt scheme without the participation of these subcontractors. Today's indictments, along with yesterday's indictment of LEHR, are part of this Office's commitment to rooting out corruption in every level of the construction industry."
LEHR is a Manhattan-based construction company paid by its clients to oversee interior renovation construction projects, acting in the capacity of either a general contractor ("GC")—in which case it was paid a flat "lump sum" fee—or as a construction manager ("CM"), where it was paid a percentage of construction costs.
According to documents filed in court, the defendants engaged in a secret scheme with LEHR executives to inflate the purchase orders for work performed on numerous interior CM projects from 2007 to 2010. Once paid for their work by LEHR'S clients, these subcontractors then "held" stolen proceeds on behalf of LEHR. To effectuate the return of these stolen moneys to Lehr, these subcontractors performed additional work for Lehr on subsequent GC projects. LEHR, through its collusion with the participating subcontractors, stole an estimated $30 million from its construction management clients over the past decade.
These subcontractors performed work for LEHR on the following interior renovation/construction projects: Holland & Knight, a law firm located at 31 West 52nd Street; Unum, an Insurance Company located at 666 Third Avenue; Fidelity Investments, an Investment Firm located at 200 Liberty Street; and Zurich North America, a bank located at 105 East 17th Street.
Yesterday, LEHR and four of its executives—Executive Vice-President and Director JEFFREY LAZAR, Executive Vice-President in charge of Operations TODD PHILLIPS, Finance Director STEVEN HALPER, and Chief of Estimating Department and Cost Control STEVEN WASSERMAN—were indicted on charges of Enterprise Corruption, Scheme to Defraud, and Grand Larceny in the Second, Third, and Fourth Degrees. In addition, the corporation and HALPER were charged with Money Laundering in the Second Degree.
The investigation was a joint endeavor between the Manhattan District Attorney's Rackets Bureau and a detail of the Special Investigations Unit of the New York State Police (NYSP) assigned to the Bureau. The indictment announced today is the result of ongoing investigations by the District Attorney's Office into fraud and corruption in the New York City construction industry.
District Attorney Vance thanked the New York State Police for their assistance in the investigation, including Superintendent Joseph D'Amico, Special Investigation Unit Major Matthew S. Renneman, Lieutenant George Nohai, and lead Investigator Gary Titus, who was supervised by Senior Investigator Gustav Talleur.
Assistant District Attorney Christopher Beard, Senior Investigative Counsel, and Assistant District Attorney Aaron Sato, assigned to the Rackets Bureau, are handling the prosecution of the case under the supervision of Assistant District Attorney Michael Scotto, Chief of the Rackets Bureau and Deputy Chief of the Investigations Division, and Assistant District Attorney Brenda Fischer, Chief of the Labor Investigations and Construction Fraud Unit. Trial Preparation Assistant Dan Murphy assisted with the investigation.
Defendant Information:
GODSELL CONSTRUCTION CORPORATION
Hicksville, New York
Charge:
Grand Larceny in the Second Degree, class C felony, 1 count
ARTHUR GODSELL, D.O.B., 7/13/57
Syosset, New York
Charge:
Grand Larceny in the Second Degree, class C felony, 1 count
JT ROSELLE LIGHTING, INC.
Jericho, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 3 counts
JAMES ROSELLE, D.O.B., 5/5/56
Oyster Bay, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 3 counts
LIBERTY CONTRACTING CORPORATION
North Bergen, New Jersey
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
GEORGE FOTIADIS, D.O.B., 9/15/73
Monroe Township, New Jersey
Charge:
Grand Larceny in the Third Degree, class D felony, 1 count
KEVIN FOTIADIS, D.O.B., 2/13/79
Saddlebrook, New Jersey
Charge:
Grand Larceny in the Third Degree, class D felony, 1 count
PJ MECHANICAL
New York, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
JAMES PAPPAS, D.O.B., 8/4/64
Glen Head, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
SUPERIOR ACOUSTICS, INC.
New York, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
KENNETH MCGUIGAN, D.O.B., 8/4/61
Lloyd Harbor, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
SWEENEY & HARKIN CARPENTRY
Long Island City, New York
MICHAEL HAYES, D.O.B., 5/10/67
Pearl River, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
A class C felony is punishable by up to 15 years in prison, and a class D felony is punishable by up to 7 years in prison.
[1] The charges contained in the indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The announcement comes one day after DA Vance announced LEHR and four executives were indicted on crimes including Enterprise Corruption, the New York State Racketeering law. GODSELL CONSTRUCTION CORPORATION and its owner ARTHUR GODSELL are charged with Grand Larceny in the Second Degree. JT ROSELLE LIGHTING, INC. and its owner JAMES ROSELLE, LIBERTY CONTRACTING CORPORATION and its owners GEORGE FOTIADIS and KEVIN FOTIADIS, PJ MECHANICAL and its owner JAMES PAPPAS, SUPERIOR ACOUSTICS, INC. and its owner KENNETH MCGUIGAN, and SWEENEY & HARKIN CARPENTRY and its owner MICHAEL HAYES are charged with Grand Larceny in the Third Degree.[1]
"The defendants in this case cheated clients out of millions of dollars, and their honest competitors out of valuable construction jobs," said District Attorney Vance. "LEHR would not have been able to operate its corrupt scheme without the participation of these subcontractors. Today's indictments, along with yesterday's indictment of LEHR, are part of this Office's commitment to rooting out corruption in every level of the construction industry."
LEHR is a Manhattan-based construction company paid by its clients to oversee interior renovation construction projects, acting in the capacity of either a general contractor ("GC")—in which case it was paid a flat "lump sum" fee—or as a construction manager ("CM"), where it was paid a percentage of construction costs.
According to documents filed in court, the defendants engaged in a secret scheme with LEHR executives to inflate the purchase orders for work performed on numerous interior CM projects from 2007 to 2010. Once paid for their work by LEHR'S clients, these subcontractors then "held" stolen proceeds on behalf of LEHR. To effectuate the return of these stolen moneys to Lehr, these subcontractors performed additional work for Lehr on subsequent GC projects. LEHR, through its collusion with the participating subcontractors, stole an estimated $30 million from its construction management clients over the past decade.
These subcontractors performed work for LEHR on the following interior renovation/construction projects: Holland & Knight, a law firm located at 31 West 52nd Street; Unum, an Insurance Company located at 666 Third Avenue; Fidelity Investments, an Investment Firm located at 200 Liberty Street; and Zurich North America, a bank located at 105 East 17th Street.
Yesterday, LEHR and four of its executives—Executive Vice-President and Director JEFFREY LAZAR, Executive Vice-President in charge of Operations TODD PHILLIPS, Finance Director STEVEN HALPER, and Chief of Estimating Department and Cost Control STEVEN WASSERMAN—were indicted on charges of Enterprise Corruption, Scheme to Defraud, and Grand Larceny in the Second, Third, and Fourth Degrees. In addition, the corporation and HALPER were charged with Money Laundering in the Second Degree.
The investigation was a joint endeavor between the Manhattan District Attorney's Rackets Bureau and a detail of the Special Investigations Unit of the New York State Police (NYSP) assigned to the Bureau. The indictment announced today is the result of ongoing investigations by the District Attorney's Office into fraud and corruption in the New York City construction industry.
District Attorney Vance thanked the New York State Police for their assistance in the investigation, including Superintendent Joseph D'Amico, Special Investigation Unit Major Matthew S. Renneman, Lieutenant George Nohai, and lead Investigator Gary Titus, who was supervised by Senior Investigator Gustav Talleur.
Assistant District Attorney Christopher Beard, Senior Investigative Counsel, and Assistant District Attorney Aaron Sato, assigned to the Rackets Bureau, are handling the prosecution of the case under the supervision of Assistant District Attorney Michael Scotto, Chief of the Rackets Bureau and Deputy Chief of the Investigations Division, and Assistant District Attorney Brenda Fischer, Chief of the Labor Investigations and Construction Fraud Unit. Trial Preparation Assistant Dan Murphy assisted with the investigation.
Defendant Information:
GODSELL CONSTRUCTION CORPORATION
Hicksville, New York
Charge:
Grand Larceny in the Second Degree, class C felony, 1 count
ARTHUR GODSELL, D.O.B., 7/13/57
Syosset, New York
Charge:
Grand Larceny in the Second Degree, class C felony, 1 count
JT ROSELLE LIGHTING, INC.
Jericho, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 3 counts
JAMES ROSELLE, D.O.B., 5/5/56
Oyster Bay, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 3 counts
LIBERTY CONTRACTING CORPORATION
North Bergen, New Jersey
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
GEORGE FOTIADIS, D.O.B., 9/15/73
Monroe Township, New Jersey
Charge:
Grand Larceny in the Third Degree, class D felony, 1 count
KEVIN FOTIADIS, D.O.B., 2/13/79
Saddlebrook, New Jersey
Charge:
Grand Larceny in the Third Degree, class D felony, 1 count
PJ MECHANICAL
New York, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
JAMES PAPPAS, D.O.B., 8/4/64
Glen Head, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
SUPERIOR ACOUSTICS, INC.
New York, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
KENNETH MCGUIGAN, D.O.B., 8/4/61
Lloyd Harbor, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
SWEENEY & HARKIN CARPENTRY
Long Island City, New York
MICHAEL HAYES, D.O.B., 5/10/67
Pearl River, New York
Charge:
Grand Larceny in the Third Degree, class D felony, 2 counts
A class C felony is punishable by up to 15 years in prison, and a class D felony is punishable by up to 7 years in prison.
[1] The charges contained in the indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
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