New York companies indicted in wide-ranging construction fraud case

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A total of six construction companies and eight individuals face indictments relating to fraud and corruption on affordable housing projects in New York City and the tri-state area.

The indictments follow a long-term investigation by the Manhattan district attorney’s (DA) office, which started when investigators identified a possible criminal enterprise after observing suspicious check-cashing activity.

This then led to separate investigations into recipients of bribes and alleged Minority and Women-Owned Business Enterprises (M/WBE) fraud schemes.

One indictment charges JM3 Construction and its principal Lawrence Wecker (82), Michael Speier (46), Joseph Guinta (57), Lisa Rossi (52), and Marcos Pinheiro (65) as well as their companies with enterprise corruption.

The indictment alleges that they engaged in multiple criminal schemes to increase their business revenue to the detriment of workers and fair competition.

It charges the defendants with 60 counts, including conspiracy, insurance fraud, grand larceny, money laundering, falsifying business records, commercial bribery, scheme to defraud and offering a false instrument for filing.

Wecker and JM3 Construction, a large drywall and carpentry company, specialised in government-subsidised housing projects in New York County and the greater New York City area.

The indictment alleges that JM3 Construction and their companies engaged in a “multitude of criminal schemes” from 2015 through to 2021, including falsifying the business records related to the large, multi-million-dollar cash payrolls of JM3 Construction and two subcontracting companies (JACG Construction and MGS Construction) led by two men on the JM3 Construction payroll — Guinta and Pinheiro.

The indictment also accused JM3 Construction and its related businesses of engaging in a “pervasive and multi-faceted” M/WBE fraud scheme to obtain government-subsidized affordable housing contracts.

This involved falsifying business records and offering false instruments for filing with governmental entities (the New York City Department of Housing Preservation and Development and the New York State Department of Homes and Community Renewal) to make it appear that M/WBE firms were providing goods and services on projects. In fact, JM3 Construction and/or other non-M/WBE firms provided the goods and services, according to the filing.

Among a multitude of allegations, the indictment also accused Wecker and JM3 Construction of rigging project bids to ensure the company was awarded projects with inflated amounts to cover bribes. In one instance involving a drywall contract for nearly $10 million, it was alleged that the price was inflated by $400,000 so that JM3 Construction paying a $50,000 kickback to the general contractor who awarded them the project.

Manhattan district attorney Alvin L. Bragg said, “The common factor in all of these alleged schemes is greed at all costs.

“When the field is rigged, law-abiding companies and legitimate MWBEs are cheated out of much-needed contracts. And when executives care more about their bottom line than their employees and the law, hard-working New Yorkers suffer. These indictments send the message that the Manhattan D.A.’s Office does not tolerate fraud in any form.”