'Greed At All Costs': 14 Charged In NYC Construction Corruption Scheme

NEW YORK CITY — The "pervasive fraud and corruption" of more than a dozen New York City construction executives and companies left workers dangerously uninsured and rigged projects to exclude businesses owned by women and minorities, prosecutors said Tuesday.

A sprawling set of six indictments unveiled by Manhattan District Attorney Alvin Bragg charges eight people and six companies with a slew of corruption-related offenses.

The indictments outline schemes that defrauded a state insurance fund of more than $1.7 million, rigged construction project bids to cover high-dollar kickbacks and outright stole money from subcontractors.

“The common factor in all of these schemes is simple: greed at all costs,” Bragg said in a news conference.

The main indictment centers around Lawrence Wecker, 82, and four of his colleagues centered around Wecker's JM3 Construction, a large non-union drywall and carpentry company that specialized in affordable housing projects.

Wecker and his colleagues face 60 total criminal counts in the indictment, from conspiracy to insurance fraud to money laundering.

The whole enterprise used a series of shell companies to cash legitimate-seeming checks that were used to fund a $150,000-a-week cash payroll, prosecutors said.

None of that cash was reported to the state's insurance fund, Bragg said, meaning workers in the very dangerous construction industry were exposed and underinsured.

"The defendants tried to keep injured workers from going to the hospital so their clients and insurance providers would never discover the job site injuries," he said.

"And when workers did need emergency treatment, including in one instance more than 45 stitches for a workplace injury, the defendants instructed them to lie about where those injuries took place."

In total, more than $1.7 million was defrauded from the state insurance fund, Bragg said.

The corruption didn't stop there, he said

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

The indictments accused JM3 and another company of falsely claiming they used minority and women owned business enterprises, or MWBEs.

In reality, they used MWBEs as "pass-throughs" to gain million-dollar contracts, prosecutors said.

By doing so, the companies undermined a program designed to provide equity in the construction industry, said Jocelyn Strauber, the city's Department of Investigation commissioner.

“The criminal conduct at issue here frustrated that goal by denying businesses historically excluded from government construction projects their rightful seat at the table,” she said.