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World Trade Center contractor charged in multimillion-dollar fraud

Posted by Eric Walsh on Friday, August 1, 2014 Under: 848FINACE

Trials and ArbitrationJustice SystemCrimeBusinessPort Authority of New York and New Jersey

NEW YORK (Reuters) - The owner of a company that has done nearly $1 billion in construction work at the World Trade Center was charged on Thursday with defrauding a government program intended to promote minority- and women-owned businesses.

U.S. prosecutors charged Larry Davis, the chief executive of DCM Erectors Inc, with wire fraud and conspiracy in connection to work the company performed for the Port Authority of New York and New Jersey, which is heading up the redevelopment of the World Trade Center following the Sept. 11, 2001, attacks that destroyed the site's twin towers.

Two alleged co-conspirators previously pleaded guilty to similar charges and have been cooperating with authorities, the government said.

"He is looking forward to his day in court," Sam Talkin, a lawyer for Davis, said during a hearing in New York before U.S. Magistrate Judge Debra Freeman. "He wants to fight these charges."

Assistant U.S. Attorney Carrie Cohen said in court that prosecutors plan to add charges related to other DCM construction projects.

In 2007, the Port Authority awarded DCM a $256 million contract to erect steel in 1 World Trade Center, the country's tallest skyscraper. Two years later, DCM won a $330 million contract for work at the World Trade Center Transportation Hub, a new transit center.

The value of the contracts has risen to nearly $1 billion over the years, prosecutors said.

In both cases, DCM was subject to Port Authority regulations calling for contractors to assign a certain percentage of construction work to minority-owned or women-owned businesses.

Prosecutors said Davis, a 63-year-old Canadian citizen, paid the owners of two such businesses to help him make it appear as though they had done work for DCM through fraudulent documents.

In one instance, Davis arranged for at least $2 million in compensation for Johnny Garcia, the owner of minority-owned Solera Construction, the government said.

Davis claimed a joint venture between Solera and DCM did about $70 million of work when, in fact, DCM did the work itself or hired a non-minority subcontractor, prosecutors said.

Similarly, Davis conspired with Gale D'Aloia, the chief executive of a shell company called GLS Enterprises Inc, according to prosecutors. Davis falsely claimed GLS did surveying work at the site, prosecutors said.

Both Garcia and D'Aloia have pleaded guilty and agreed to help prosecutors.

(Editing by Eric Walsh)

In : 848FINACE 

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