Construction Kickbacks

David Goldsmith

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During a court hearing this winter, alleged loan shark Mark “Chippy” Kocaj urged a federal judge to allow him to work for a Bronx-based construction company.

Kocaj was out on bail, awaiting trial for his alleged role in a mafia-connected construction bribery scheme. In the meantime, he wanted to return to the industry where he’d spent most of his career — but prosecutors weren’t keen on the idea.

“We do have concerns about that company and its connections with organized crime and other misconduct they may have committed,” Assistant District Attorney Keith Daniel Edelman said of the contractor offering the job, according to a transcript of the hearing. “He may be exposed to further violations. He may be exposed to other associates.”

Ultimately, the judge rejected his request.

Kocaj is the cousin of John “Smiley” Simonlacaj — a former managing director at Ziel Feldman’s development firm HFZ Capital Group — and their relationship helped enable a wide-ranging scheme that ensnared at least two New York developers and three construction management firms, prosecutors allege. Kocaj’s attorney, Christopher Booth, and Simonlacaj’s attorney, Glen Colton, both declined to comment.

One of the projects at the heart of the case is HFZ’s $2 billion condo tower at 76 11th Avenue, known as the XI.

Simonlacaj, who has since been fired from HFZ, is accused of letting the Gambino crime family skim hundreds of thousands of dollars from the condo development and other projects in New York through CWC Contracting — a carpentry subcontractor that allegedly doled out bribes to employees of multiple companies in exchange for work and larger payouts.

“HFZ has not been the target of the government’s investigation, and there has never been any suggestion that HFZ did anything inappropriate,” a spokesperson for the developer said in a statement. “Rather, it appears that HFZ, like the other developers described in the indictment, may have been a victim of the alleged acts.”

In addition to HFZ’s Simonlacaj, an employee at RXR Realty was also allegedly offered kickbacks by CWC, court documents show.

The subcontractor is accused of inflating bills for work that, in some cases, the company didn’t even perform. Instead, the money was allegedly used, in part, to pay for work performed at construction executives’ personal homes. The alleged scheme played out in just one year, from June 2018 to July 2019. But according to prosecutors, in that time period, the little-known subcontractor was able to quietly manipulate some of the biggest names in Manhattan real estate and exploit multibillion-dollar projects.

In addition to HFZ and RXR, CWC’s developer and general contractor clients over the past decade include Gary Barnett’s Extell Development and Tishman Construction, according to an archived version of the CWC’s website and permits filed with the city Department of Buildings. It worked for these firms despite the fact that CWC owner Andrew Campos had previously been accused of mob-related activities. None of the larger development firms or general contractors have been accused of wrongdoing.

The indictment, filed last December against Kocaj, Simonlacaj and nine others, is a case study on how organized crime can still infiltrate New York development projects even at a time when mob activity is much lower than it was in the 1980s and 1990s.

Dozens of subcontractors can work on any given job at one time, creating myriad opportunities to inflate bills and strong-arm workers who may already be indebted to the mafia, several former prosecutors told The Real Deal. And unless a developer is closely monitoring who is working on their site, such behavior can go undetected.

Still, the influence of organized crime in construction isn’t as “systematic or unbridled” as it was decades ago, said Bruce Maffeo, an attorney with Cozen O’Connor and a former prosecutor with the U.S. Attorney’s Office for the Eastern District of New York who served on an organized crime task force in the 1980s.

“You couldn’t pour a yard of concrete in Manhattan without kicking money to the Genovese or Gambino crime family,” he said. “My sense is that it’s not as dramatic as it was 30-plus years ago.”

Federal prosecutors declared last December, however, that the Gambino family is “thriving.” And while the mafia may no longer have as strong a hold on individual trades, real estate in New York will always pose enticing, albeit illicit, opportunities, according to Maffeo.
 

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“This is one of those problems that is never going to go away,” he said. “There’s just too much money involved.”

Tangled ties

HFZ’s luxury condo project along the High Line was already facing headwinds in early 2019, and the ongoing coronavirus pandemic will only make it harder to move units going forward.

No sales had been recorded at the project as of late March, according to property records. However, a spokesperson for Douglas Elliman, which is handling sales at the property, said that eight contracts at the project were signed prior to the coronavirus’ rampant spread.

The twisting luxury condo towers have long been viewed as an ambitious and risky undertaking for HFZ, due in part to predevelopment costs of about $1 billion and a $1.25 billion construction loan. And that was all before the indictment dropped last December.

Executives at HFZ, which oversees more than $10 billion in development, were well aware that Simonlacaj had a previous brush with the law, court records from a separate case show.

In 2016, he was charged with and pleaded guilty to instructing someone who did business with a company he owned to file a false tax form five years earlier. Managing principal Nir Meir — who helped found HFZ in 2005 — penned a letter to the court on Simonlacaj’s behalf at the time, calling him a “key member” of the firm who “has a reputation for being fair and honest within the industry.”

In the latest case involving CWC, Simonlacaj pleaded not guilty to charges of tax fraud and wire fraud and was released on $250,000 bail on Dec. 6, 2019.

Court documents indicate that HFZ’s Belnord, a landmarked pre-war building on the Upper West Side, was also a target of the CWC scheme.

During a recorded conversation last March, alleged Gambino “crime family soldier” Vincent Fiore discussed hiding payments for work done on an HFZ employee’s Bronx home, according to a detention memo written by U.S. Attorney Richard Donoghue and filed with the court in December 2019.

Fiore wanted the expenses to be attributed to work done on the Belnord, according to the detention memo.

Fiore said CWC had sent employees to work on a home owned by an HFZ employee on Delanoy Avenue in the Bronx, according to the letter. In the recorded conversation, Fiore instructs an unnamed co-conspirator to account for CWC’s payments for work on the Delanoy Avenue home by putting them “against the Belnord.”
 

David Goldsmith

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A similar scheme is at the center of the charges against Simonlacaj, according to the detention memo.

“I owe [the Worker] some money. I forgot to pay him,” Fiore said, according to court documents. “One is John Si’s house; we owe him some money there.” Fiore then said he also owed the worker some money for working on the HFZ employee’s Delanoy Avenue home, according to the memo.

An employee of HFZ has owned a home on Delanoy Avenue in the Bronx since 1999 and is listed on DOB documents as a representative for the Belnord, according to city records. The employee previously worked for Extell when the company owned the Belnord and was hired by HFZ when Feldman’s firm bought the property in 2015 for $575 million.

There is no indication in court documents of the employee being involved with a quid pro quo. The employee was not charged in the indictment.

HFZ said it fired CWC and its affiliates from all of its projects after learning about the federal investigation, months ahead of the December indictment. Omnibuild, the general contractor on the XI, declined to comment. Omnibuild has not been accused of wrongdoing in the case.

Overall, CWC’s kickback scheme involved employees at two development companies, HFZ and RXR, and three general contractors, one of which appears to be Hudson Meridian, court records show.

Court papers identify a firm as “Construction Company #5,” and the indictment says it worked as the general contractor on an unnamed Yonkers project. Donoghue’s December 2019 memo identified the Yonkers project as Larkin Plaza, RXR and Rising Development’s residential and retail development, where Hudson Meridian was the general contractor.

Hudson Meridian said it fired CWC after the subcontractor abandoned Larkin Plaza following the release of the indictment. CWC is accused of overbilling “Construction Company #5,” and Hudson Meridian has not been charged with any crimes in the case.

“Hudson Meridian has fully cooperated with the U.S. Attorney’s office, and we will continue to do so,” said Daniel Katz, an attorney for the company, who would not comment on whether or not the general contractor is one of the unnamed construction firms in court documents. “Hudson Meridian has not engaged in any wrongdoing and, as far as we know, is not the subject of any investigation.” The same goes for the company’s employees, Katz said.

According to Donoghue’s detention memo, a project manager for Larkin Plaza was offered bribes in the form of free construction materials for a jiu-jitsu gym in White Plains that the manager is “associated with.” In exchange, the project manager was expected to approve change orders at Larkin Plaza, according to the detention memo. The employee is not named, but Matthew Kachmar is listed on LinkedIn as a senior property manager at RXR and is listed on the website of East Coast United Brazilian Jiu-Jitsu in White Plains as its CEO.

The detention memo details another recorded conversation where Fiore expresses frustration with the project manager (Kachmar), saying, “The kid is not even making an attempt,” despite labor and materials for the jiu-jitsu gym costing north of $40,000. RXR confirmed that the change orders mentioned in the letter were never actually performed, and Kachmar did not have the authority to sign off on them in the first place.

Kachmar left RXR sometime in February. He declined to comment for this story. Neither he nor RXR have been accused by prosecutors of wrongdoing.
 

David Goldsmith

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A similar scheme is at the center of the charges against Simonlacaj, according to the detention memo.

“I owe [the Worker] some money. I forgot to pay him,” Fiore said, according to court documents. “One is John Si’s house; we owe him some money there.” Fiore then said he also owed the worker some money for working on the HFZ employee’s Delanoy Avenue home, according to the memo.

An employee of HFZ has owned a home on Delanoy Avenue in the Bronx since 1999 and is listed on DOB documents as a representative for the Belnord, according to city records. The employee previously worked for Extell when the company owned the Belnord and was hired by HFZ when Feldman’s firm bought the property in 2015 for $575 million.

There is no indication in court documents of the employee being involved with a quid pro quo. The employee was not charged in the indictment.

HFZ said it fired CWC and its affiliates from all of its projects after learning about the federal investigation, months ahead of the December indictment. Omnibuild, the general contractor on the XI, declined to comment. Omnibuild has not been accused of wrongdoing in the case.

Overall, CWC’s kickback scheme involved employees at two development companies, HFZ and RXR, and three general contractors, one of which appears to be Hudson Meridian, court records show.

Court papers identify a firm as “Construction Company #5,” and the indictment says it worked as the general contractor on an unnamed Yonkers project. Donoghue’s December 2019 memo identified the Yonkers project as Larkin Plaza, RXR and Rising Development’s residential and retail development, where Hudson Meridian was the general contractor.

Hudson Meridian said it fired CWC after the subcontractor abandoned Larkin Plaza following the release of the indictment. CWC is accused of overbilling “Construction Company #5,” and Hudson Meridian has not been charged with any crimes in the case.

“Hudson Meridian has fully cooperated with the U.S. Attorney’s office, and we will continue to do so,” said Daniel Katz, an attorney for the company, who would not comment on whether or not the general contractor is one of the unnamed construction firms in court documents. “Hudson Meridian has not engaged in any wrongdoing and, as far as we know, is not the subject of any investigation.” The same goes for the company’s employees, Katz said.

According to Donoghue’s detention memo, a project manager for Larkin Plaza was offered bribes in the form of free construction materials for a jiu-jitsu gym in White Plains that the manager is “associated with.” In exchange, the project manager was expected to approve change orders at Larkin Plaza, according to the detention memo. The employee is not named, but Matthew Kachmar is listed on LinkedIn as a senior property manager at RXR and is listed on the website of East Coast United Brazilian Jiu-Jitsu in White Plains as its CEO.

The detention memo details another recorded conversation where Fiore expresses frustration with the project manager (Kachmar), saying, “The kid is not even making an attempt,” despite labor and materials for the jiu-jitsu gym costing north of $40,000. RXR confirmed that the change orders mentioned in the letter were never actually performed, and Kachmar did not have the authority to sign off on them in the first place.

Kachmar left RXR sometime in February. He declined to comment for this story. Neither he nor RXR have been accused by prosecutors of wrongdoing.
 

David Goldsmith

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Passing the buck
Developers aren’t often involved with vetting subcontractors who work on their sites — meaning that responsibility largely falls to construction management firms. However, some owners do ask outside firms to investigate companies before they are hired.
Paul E. Ryan, who conducts reputational reviews of construction and real estate companies and formerly served on a labor racketeering task force for the Manhattan District Attorney’s Office, said organized crime is “still a major factor” that his firm K2 Intelligence checks for when conducting reviews of a subcontractor’s reputation.
“It’s not something that has diminished over time,” he said.
A key part of such reviews, Ryan added, is an investigation into the subcontractor’s principals. Some companies may risk hiring a firm whose leader has a record of indiscretions, but they often build clauses into their contracts to enable the removal of the firm should the project go south. But to have such foresight, he said, an owner or construction manager must have a clear picture of the subcontractor’s history.
“You can’t get there without knowing what you are dealing with,” he said.
CWC’s general contractor license is registered to Campos, according to the DOB, and his criminal history is readily available online. The 2003 indictment involving the Gambino family was covered by multiple media outlets, and federal prison records online show he spent nearly two years behind bars. At the time, the New York Sun even wrote a profile detailing Campos’ legal woes, as well as his friendship with hip-hop mogul Sean “Diddy” Combs.
It’s unknown if the construction managers that hired CWC were aware of his record — and if they weren’t, how this information slipped past background checks.
If owners take more of an active role in the vetting process, such risks could become less of an issue, according to Ryan.
“When owners and developers are involved in the process for selection and the oversight of subcontractor selection, it mitigates these types of concerns,” he said. “The more people who are looking, the less this would become an issue.”
Katz, the attorney for Hudson Meridian, said Campos’ previous indictment did not come up in the background check on CWC, and the firm is now reviewing their process for vetting subcontractors. Hudson Meridian is no longer using the vendor who conducted the background check, but it did not make this decision because of the CWC case, according to Katz.
RXR indicated that as a result of this case, the company “no longer relies on construction managers or general contractors to perform background checks.” Every trade contractor working on an RXR job now must “be prequalified and fully vetted.”
HFZ said it has commissioned “a top-to-bottom review of those policies to ensure the integrity of our operations going forward.” The company has also hired outside attorneys, auditors and investigators to assess if the firm was financially harmed by the defendants, according to HFZ’s spokesperson.
Multiple developers who CWC has claimed it worked with either downplayed their relationship or denied that one exists at all.
Campos’ firm worked on Extell’s 11-unit condo project at 1010 Park Avenue, for instance, where it was a carpentry and drywall subcontractor for Gilbane, the project’s construction manager. But a spokesperson for Gary Barnett’s development firm said, “Extell has no contractual or other relationship with CWC, who completed their work for Gilbane and was paid in accordance with their contract.”
CWC was one of 68 subcontractors who worked on the Park Avenue condo tower, according to Gilbane. A spokesperson for the company would not comment on the specifics of the company’s vetting process for subcontractors.
“Gilbane has maintained the highest standards of business conduct and ethics throughout its 150-year history,” a company spokesperson said in a statement. “Gilbane has cooperated fully as a witness in the government’s investigation and will continue to do so.”
But the December indictment hasn’t deterred other construction companies from seeking out some of the defendants.
Although the court denied Kocaj’s request to work for the Bronx-based construction company that prosecutors claimed had ties to organized crime, for instance, a federal judge is now reviewing his request to work for an elevator company instead.
Gerald McMahon, a defense attorney who has represented multiple clients with alleged mafia connections, said that, while certain industries are barred from hiring people who have any suspected affiliations with organized crime, construction is not one of them.
“It’s pretty much ad hoc. Whatever companies want to do, they can do, and so I think that’s why you would have disparate treatment in the construction industry, as opposed to some other industries,” he said. “There is no hard and fast rule. This is America. If you’re charged with a crime, you’re presumed to be innocent.”
 

David Goldsmith

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Cracks in the foundation: Construction’s kickback problem​

Construction is inherently vulnerable to corruption, but contractors have a way of surviving it

A small Queens glass company sent out a letter in 2017, alerting clients that it had fired three of its employees. It did not say why, but that became clear soon enough.
Authorities had discovered an alleged bribery scheme centered not on little-known Jonathan Metal & Glass but on Turner Construction and Bloomberg. Executives from the two giant firms were charged with accepting millions of dollars’ worth of payoffs in exchange for inflating interior construction contracts.
Federal authorities raided Turner’s offices in October 2017, roughly a week before the glass shop revealed the firings. One of the terminated employees was later accused in the scheme, along with nearly two dozen other subcontractors and vendors.

The federal and state criminal cases against former Turner and Bloomberg employees, as well as the subcontractors, are only now nearing a conclusion. Four former executives of the big firms have pleaded guilty to tax evasion, theft and other charges.
By marking up construction costs at Bloomberg offices, executives stole at least $15 million from the media and financial information company, authorities said. They now face prison.

As for Turner, although its client was ripped off, the firm was not charged, suffered no apparent blow to its reputation and has continued to win large contracts. Which surprised absolutely no one.
Large construction companies often emerge from corruption cases relatively unscathed, even when found to be directly involved in wrongdoing. They pay a fine, issue an apologetic statement and continue to bid on work.

But the Turner case also underscores how vulnerable construction is to malfeasance and the persistent appetite of industry players to cheat at every level of the process.
“You can never be content with the controls that you set up because people who are looking to pad their invoices are vigilant as well, in a negative sense,” said Dennis Walsh, a former prosecutor with the New York attorney general’s Organized Crime Task Force and a consultant with Guidepost Solutions. “Companies need to think in a forward way and be mindful of the tireless efforts of some contractors to exploit opportunities.”

The scheme
In September 2017, a project superintendent for Turner, Vito Nigro, sent a cryptic text message to an air conditioning subcontractor.
“When u bringing lunch so we’re done. The other guy is getting married,” he wrote, according to state prosecutors.

He was referring not to food but to a series of illicit cash payments that were used in part, to help pay for then-Bloomberg construction manager Michael Campana’s wedding photographer, prosecutors allege. Nigro repeatedly referred to bribes in lunch terms, most often as “sandwiches,” according to the 2018 indictment.
The two, along with more than a dozen others, were charged with conspiring with various subcontractors and vendors to award work to certain companies, artificially driving up the costs of construction work at Bloomberg’s offices at 120 Park Avenue and 919 Third Avenue.

In return, the subcontractors allegedly provided cash bribes and other kickbacks, including vacations and home renovations, to executives at Bloomberg and Turner. This went on for six and a half years.
Finally, a month after Nigro’s message about “lunch,” New York State Police officers and investigators crashed the party.
Prosecutors said at the time that the graft turned the New Jersey home of Anthony Guzzone, Bloomberg’s head of global construction, into a “palace.”

A separate federal indictment slapped tax-evasion charges on the executives, who had not reported the illicit benefits to the IRS. Attorneys for Nigro and Campana did not comment for this story.
The scheme was not novel in the annals of construction fraud. In the past three decades, New York’s largest construction managers have paid millions in fines and penalties to settle similar allegations. But the case was notable for a few key reasons.

For one, Bloomberg and Turner are huge, sophisticated companies. Bloomberg, founded by former New York City Mayor Michael Bloomberg and headquartered on Lexington Avenue, is worth as much as $60 billion, according to Burton-Taylor International Consulting. Turner bills itself as the country’s largest construction manager. Its global revenue last year was $14.66 billion, according to ENR.

Turner is a subsidiary of German engineering giant Hochtief, which acquired the New York–based construction manager in 1999 for $263 million. Since then, Turner has expanded across the U.S. — where it now has more than 40 offices — and internationally.
But size can make corruption harder to find. “Rogue actors” can keep misdeeds under the radar for an extended period at a large company, especially when projects are worth tens of millions of dollars, according to Jodie Kane, head of the Manhattan district attorney’s Rackets Bureau.

“It’s easy to skim off what would still be a considerable amount of money for many of us but, in the larger view of the project, is a small fraction,” she said. The alleged involvement of top Bloomberg executives likely made the scheme even harder to stop.
“I think it’s easy to go undetected for a long time, even with very rigorous internal compliance and especially when it’s the gatekeeper, who’s supposed to be identifying the compliance, who ends up being a bad actor,” Kane said. “Really, that’s the worst of all possible worlds.”

Some elements of a construction contract can be readily inflated if they have no fixed value, such as responding to conditions on a site that emerge during the building process.
“If there was a stock that you could buy for a dollar, and someone paid $1.10, you’d know something was up,” said Ronald Goldstock, a private, independent inspector general and construction integrity monitor who was once director of the New York State Organized Crime Task Force. “The construction industry by its very nature is rife with the possibilities of bribery and extortion.”

Diana Florence, who spent 25 years at the Manhattan district attorney’s office and headed its Construction Fraud Task Force, said looking at a company’s culture is key in determining its culpability.
“There also has to be fairness,” she said. “You can’t indict an entire company, and you shouldn’t, based on a rogue employee.”
But some believe Bloomberg should have been prepared for this kind of scheme. Bloomberg’s previous construction manager, Structure Tone, was also accused of overbilling the firm, as well as other clients. Structure Tone pleaded guilty in 2014 to falsifying business records.

Also, Nastasi & Associates, a carpentry subcontractor, had warned Bloomberg and Turner of problems with their bidding processes, according to lawsuits filed after the criminal federal and state cases were revealed.
The company’s owner, Anthony Nastasi, claims in the suits that after he raised questions, his company was abruptly fired from a Bloomberg project and then blocked from bidding on others, which destroyed his company.

“This is how Turner runs its business,” the lawsuit states. “Everyone knows the risk of crossing Turner, and Turner does not hesitate to impose its enormous market power on subcontractors that depend on Turner for work.”
The suit, which a Turner spokesperson said has “no merit” and was dismissed in March in a decision now being appealed, also contends that both companies ignored “red flags” that the schemes “reached the highest levels of these companies, permeating through many departments and levels of employees in different areas of the construction business.”

“Not only should their compliance programs have caught this scheme, based on the breadth and brazenness of the conduct by their highest-level executives,” the lawsuit claims, “but these companies have long been on alert that their employees, including their highest-level executives, were susceptible to it.”
Moving on
Three years after being revealed, the federal and state cases against the Turner and Bloomberg executives are coming to a close.

Guzzone, whom prosecutors referred to as the scheme’s mastermind, faces up to five years in prison on the federal tax evasion charge and three to nine years for grand larceny in the state case. Ronald Olson, former Turner vice president and deputy operation manager, faces the same sentences. Campana was sentenced to 24 months in prison in the federal case and faces one year in the state case, after pleading guilty to tax evasion and money laundering, respectively.

An attorney for Guzzone, Alex Spiro, said in a statement that his client has “accepted responsibility for accepting gratuities and not disclosing certain matters on his taxes and will further explain the circumstances in court.” A lawyer for Olson did not comment.
One employee of Jonathan Metal & Glass, Frank Zustovich, pleaded guilty to stealing $50,000 from Bloomberg and agreed to provide authorities with the names of Bloomberg and Turner executives, according to the New York Times. Zustovich, along with at least one other employee fired from Jonathan Metal, now work for another company, GFC Ornamental Metal & Glass, according to LinkedIn.

Turner, meanwhile, seems to have emerged with nary a scratch. In New York, the company is serving as construction manager for the Spiral, Tishman Speyer’s Bjarke Ingels–designed office tower. In May it was selected to build out the interiors of Ernst & Young’s offices spanning 18 floors at One Manhattan West. Vornado Realty Trust recently tapped the company to oversee the redevelopment of 2 Penn Plaza.

“Clients recognize that the actions of two former employees do not reflect Turner’s true character of honesty and integrity,” the Turner spokesperson said about the Bloomberg case. “Turner actively cooperated with law enforcement throughout the investigation and applauds their efforts in prosecuting these individuals.”
Kane said larger companies are typically better equipped to weather bad press and reputational damage that accompanies criminal convictions. Smaller companies will sometimes shut down and reopen under a new name, she said.

But the government rarely tries to put firms out of business, a lesson learned when the conviction of Arthur Andersen in the 2001 Enron scandal triggered the disintegration of the accounting giant, costing thousands of employees their jobs.
In determining whether to go after the company itself, prosecutors consider how many people it employs and if there is a way to remedy criminal activity while keeping it in business, according to Kane.
“Many of these companies, despite criminal wrongdoing, they do good work in the construction industry,” she said. “So if you can find a way to clean up the culture of the company, but to keep the workers employed, that’s one of the things that we try to do.”
Louis Coletti, president of the Building Trades Employers Association, called the cases against Turner — a member of his group — and Bloomberg employees an “aberration.”
“At the end of the day, human beings will try to take advantage of any system,” he said. “We do all we can to prevent it, but if anybody goes asunder, rest assured they will be terminated and have been terminated.”
Indeed, executives were caught. But by the government, not by the companies. And given the weaknesses inherent in construction contracting, it appears certain such crimes will happen again.
In addition to increased corporate vigilance, Florence said, the government needs to make clear it is continuously watching for fraud. Otherwise, companies and their employees will continue to think the risk of getting caught is outweighed by potential rewards.
“It’s like Groundhog Day over and over,” she said.
 

John Walkup

Talking Manhattan on UrbanDigs.com
“At the end of the day, human beings will try to take advantage of any system,” he said. “We do all we can to prevent it, but if anybody goes asunder, rest assured they will be terminated and have been terminated.”
Indeed, executives were caught. But by the government, not by the companies. And given the weaknesses inherent in construction contracting, it appears certain such crimes will happen again.
In addition to increased corporate vigilance, Florence said, the government needs to make clear it is continuously watching for fraud. Otherwise, companies and their employees will continue to think the risk of getting caught is outweighed by potential rewards.
“It’s like Groundhog Day over and over,” she said.

----> NYC's Byzantine building codes, enigmatic zoning regulations, and mysterious local politics make everyday Groundhog Day. Perhaps its time to de-centralize and open up the process?
 

David Goldsmith

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Staff member

Colombo mob boss arrested over alleged construction union shakedown​

Defendants allegedly demanded five-figure payments tied to union​

A construction union in Queens was squeezed by alleged mobsters who demanded monthly payments from a health fund tied to the union, according to an indictment unsealed in a Brooklyn federal court.
Prosecutors allege that defendants, including Andrew Russo, the reputed boss of the Colombo crime family, made threats to take control of the health fund and demanded $10,000-plus monthly payments beginning in 2019. The union wasn’t named in the indictment, according to the Wall Street Journal.
A senior labor official also allegedly faced threats and extortion demands from the defendants, though that person also hasn’t been named.

Through recordings and wiretaps, a federal investigation was able to catch defendants allegedly talking about the kickbacks, as well as personnel decisions involved in the union and health fund. One defendant, reputed Colombo captain Vincent Ricciardo, allegedly threatened to kill the labor official in June.
“I’ll put him in the ground right in front of his wife and kids,” Ricciardo allegedly said.

Additional allegations include selling fake Department of Labor cards for $500 each saying construction workers completed certain courses and falsifying paperwork at occupational safety training schools. Those schools allegedly served as a storage space for illegal drugs and fireworks, according to the indictment.
Fourteen people were arrested on Tuesday on fraud and racketeering charges that allegedly took place over the past two decades. The fourteen have been charged in connection to the alleged crimes and arrests took place in three states: New York, New Jersey and North Carolina.

Russo pleaded not guilty to the charges during his arraignment on Tuesday, for which he appeared via video conference from a hospital where he was being treated.
Mob involvement in New York construction unions has been a longstanding issue. In November, the city’s largest construction union, the New York City District Council of Carpenters, announced it was taking steps to root out possible organized-crime ties within its membership. This January, a former HFZ Capital Group executive pleaded guilty in connection to a construction bribery scheme that skimmed funds from the developer’s projects.
 

David Goldsmith

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Contractors Indicted for Allegedly Bribing Supers at Brooklyn NYCHA Complexes
Nine contractors have been charged with bribing NYCHA superintendents in exchange for small repair contracts, Brooklyn District Attorney Eric Gonzalez announced Monday, noting that the problem is likely far more widespread.
Over a two-year period, city investigators went undercover as supers in two Brooklyn complexes, Red Hook Houses in Red Hook and Lafayette Gardens in Clinton Hill, aiming to snag deviant contractors attempting to provide kickbacks in exchange for securing an inflated contract to conduct small fixes such as window repairs, chain-link fence installation, and tile work.
The nine defendants proffered 35 bribes totaling about $20,000 cash, two $500 gift cards, and four bottles of Johnnie Walker scotch (three black label and one white label), the DA said.

“They knew what they were doing was wrong,” Gonzalez said at a press conference announcing the indictments. “There’s no question that they thought they were just being nice and providing a gift. They understood that what was happening was inappropriate.”
The DA said he hopes the indictments send a message to other supers and contractors not to engage in similar schemes that defraud the taxpayers and negatively impact NYCHA residents’ quality of life.

“Honest contractors stand no chance of doing the work if you have to corrupt the process in order to be awarded the contract,” Gonzalez said. “The residents of NYCHA often live in conditions that are deplorable, and we definitely need a system that works to their advantage to get things done quickly, but they deserve to have the best contractors working to fix items inside NYCHA without this corrupt process.”

Under current NYCHA regulations, “micro-purchase” contracts worth less than $10,000 can be awarded by supers without going through a competitive bidding process, which is intended to allow for small repairs to be addressed quickly, so residents do not have to wait for the conclusion of a long, arduous bidding war. The flip side, though, is that small contracts are rife for graft similar to those in the indictments.
Margaret Garnett, commissioner of the Department of Investigation, said that while the work was completed in all but one of the cases, allowing bribery to become the cost of doing business sends a message that contractors do not have to perform their work to the best of their ability.
“When it becomes commonplace for bribes to be paid, that really removes any incentive to do good work and be responsive and provide value for the taxpayers’ dollar,” Garnett said.

Some of the defendants were captured on videos secretly recorded by city investigators. One video shows Chatranjit Singh, of Fine Touch Construction in Queens, offering a $500 gift card to the investigator posing as a super, who then offers work on doors at Lafayette Gardens.
Another shows defendant Guriqbal Singh (no relation to Chatranjit) allegedly handing over $600 in cash in an elevator, and getting agitated when he sees a security camera, which the undercover investigator claims is not working. Another shows defendant Davinder Singh (seven of the nine defendants are named Singh, but only some are related to others; Davinder is not related to Chatranjit or Guriqbal) questioning an investigator, which the DA alleges to be scoping out whether he’ll take a bribe, and 15 minutes later handing over what the DA alleges to be $1,000.
Garnett said DOI has issued policy recommendations for NYCHA to implement to address the “vulnerabilities” exposed in the indictments. Those include moving responsibility for doling out small-dollar contracts from supers to NYCHA’s central office and adopting a “fixed-price list” for common micro-purchase repairs to prevent contractors from stiffing the housing authority.
In a statement, NYCHA spokesperson Rochel Leah Goldblatt said that the housing authority had worked in partnership with DOI on the investigation and that it was already implementing procurement reforms as part of the NYCHA Transformation Plan, aka the NYCHA Blueprint, which was mandated as part of a consent decree between the city and the feds.
“NYCHA has zero tolerance for these illegal acts committed by staff and vendors, and worked in partnership with DOI on this investigation,” Goldblatt said. “We have implemented significant changes to the systems to prevent this type of malfeasance, including updates and modifications to purchasing oversight, how contracts are awarded and tracked, and post-award contract management. They are all being implemented as part of the Transformation Plan, which was mandated by the 2019 HUD Agreement, and we will continue to do the necessary work to improve.”
Goldblatt said that NYCHA is currently implementing a new procurement oversight entity called Purchasing, Logistics, and Inventory (PLI), which will be tasked with both approving micro-purchases and approving purchases within larger contracts. PLI onboarded a senior director in August and “development purchasing teams” are expected to be in place by 2022.
The authority is also implementing checks via the city’s PASSPort portal for contracts below $250,000, improvements to its oversight of contracts after they’re awarded, implementing “comprehensive” procurement training for staff, and adopting lifetime fixed prices for small purchases within larger contracts.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
Contractors Indicted for Allegedly Bribing Supers at Brooklyn NYCHA Complexes
Nine contractors have been charged with bribing NYCHA superintendents in exchange for small repair contracts, Brooklyn District Attorney Eric Gonzalez announced Monday, noting that the problem is likely far more widespread.
Over a two-year period, city investigators went undercover as supers in two Brooklyn complexes, Red Hook Houses in Red Hook and Lafayette Gardens in Clinton Hill, aiming to snag deviant contractors attempting to provide kickbacks in exchange for securing an inflated contract to conduct small fixes such as window repairs, chain-link fence installation, and tile work.
The nine defendants proffered 35 bribes totaling about $20,000 cash, two $500 gift cards, and four bottles of Johnnie Walker scotch (three black label and one white label), the DA said.

“They knew what they were doing was wrong,” Gonzalez said at a press conference announcing the indictments. “There’s no question that they thought they were just being nice and providing a gift. They understood that what was happening was inappropriate.”
The DA said he hopes the indictments send a message to other supers and contractors not to engage in similar schemes that defraud the taxpayers and negatively impact NYCHA residents’ quality of life.

“Honest contractors stand no chance of doing the work if you have to corrupt the process in order to be awarded the contract,” Gonzalez said. “The residents of NYCHA often live in conditions that are deplorable, and we definitely need a system that works to their advantage to get things done quickly, but they deserve to have the best contractors working to fix items inside NYCHA without this corrupt process.”

Under current NYCHA regulations, “micro-purchase” contracts worth less than $10,000 can be awarded by supers without going through a competitive bidding process, which is intended to allow for small repairs to be addressed quickly, so residents do not have to wait for the conclusion of a long, arduous bidding war. The flip side, though, is that small contracts are rife for graft similar to those in the indictments.
Margaret Garnett, commissioner of the Department of Investigation, said that while the work was completed in all but one of the cases, allowing bribery to become the cost of doing business sends a message that contractors do not have to perform their work to the best of their ability.
“When it becomes commonplace for bribes to be paid, that really removes any incentive to do good work and be responsive and provide value for the taxpayers’ dollar,” Garnett said.

Some of the defendants were captured on videos secretly recorded by city investigators. One video shows Chatranjit Singh, of Fine Touch Construction in Queens, offering a $500 gift card to the investigator posing as a super, who then offers work on doors at Lafayette Gardens.
Another shows defendant Guriqbal Singh (no relation to Chatranjit) allegedly handing over $600 in cash in an elevator, and getting agitated when he sees a security camera, which the undercover investigator claims is not working. Another shows defendant Davinder Singh (seven of the nine defendants are named Singh, but only some are related to others; Davinder is not related to Chatranjit or Guriqbal) questioning an investigator, which the DA alleges to be scoping out whether he’ll take a bribe, and 15 minutes later handing over what the DA alleges to be $1,000.
Garnett said DOI has issued policy recommendations for NYCHA to implement to address the “vulnerabilities” exposed in the indictments. Those include moving responsibility for doling out small-dollar contracts from supers to NYCHA’s central office and adopting a “fixed-price list” for common micro-purchase repairs to prevent contractors from stiffing the housing authority.
In a statement, NYCHA spokesperson Rochel Leah Goldblatt said that the housing authority had worked in partnership with DOI on the investigation and that it was already implementing procurement reforms as part of the NYCHA Transformation Plan, aka the NYCHA Blueprint, which was mandated as part of a consent decree between the city and the feds.
“NYCHA has zero tolerance for these illegal acts committed by staff and vendors, and worked in partnership with DOI on this investigation,” Goldblatt said. “We have implemented significant changes to the systems to prevent this type of malfeasance, including updates and modifications to purchasing oversight, how contracts are awarded and tracked, and post-award contract management. They are all being implemented as part of the Transformation Plan, which was mandated by the 2019 HUD Agreement, and we will continue to do the necessary work to improve.”
Goldblatt said that NYCHA is currently implementing a new procurement oversight entity called Purchasing, Logistics, and Inventory (PLI), which will be tasked with both approving micro-purchases and approving purchases within larger contracts. PLI onboarded a senior director in August and “development purchasing teams” are expected to be in place by 2022.
The authority is also implementing checks via the city’s PASSPort portal for contracts below $250,000, improvements to its oversight of contracts after they’re awarded, implementing “comprehensive” procurement training for staff, and adopting lifetime fixed prices for small purchases within larger contracts.
still going on huh
 

David Goldsmith

All Powerful Moderator
Staff member

Mob still making trouble in construction industry​

Organized crime targeting nonunion contractors

The mob’s insidious ties to the construction industry are the stuff of legend. It isn’t necessarily in the past, though.
Organized crime has popped up in several recent corruption prosecutions in New York City, according to The City. Mafia ties to the industry appear to have undergone a shift in recent years, however, from unions to nonunion contractors.

The move away from unions has decreased the mob’s influence on major construction projects. But organized crime is still finding a way to infiltrate other segments of the industry, including affordable housing development, posing a threat to jobs across the city.
“They can pay half the hourly rate, no fringe benefits, and screw a bunch of guys who often can’t speak English,” former FBI special agent Bruce Mouw told the publication.

On the union front, the former leader of the New York State Building and Construction Trades Council, James Cahill, pleaded guilty to bribery and fraud charges after taking more than $100,000 in payoffs to allow contractors to avoid hiring union labor, as well as corrupting union officials. He was allegedly seen with high-level mobsters and his boasts about organized crime ties were caught on tape.
Cahill was recently sentenced to 51 months in prison.

Last month, Manhattan District Attorney Alvin Bragg indicted Lawrence Wecker’s JM3 Construction Enterprises for MWBE fraud. A total of 60 charges were announced against eight individuals and six companies under the JM3 umbrella.
Wecker allegedly has extensive ties to mob-related activity. In 2000, he was one of three dozen indicted in a bid-rigging and racketeering conspiracy targeting the concrete industry. More than a decade earlier, Wecker was cited as an unindicted co-conspirator in a case involving the concrete industry and organized crime.

Federal judges have reduced organized crime’s control of unions since the 1980s by appointing monitors. Mobsters now operate on the fringes with smaller, nonunion contractors, which aren’t policed as closely.
Since 2015, the Department of Buildings and the feds have responded to hundreds of complaints at job sites referenced in a mob kickback indictment.
 

David Goldsmith

All Powerful Moderator
Staff member

3 Hosts of an Eric Adams Fund-Raiser Are Said to Face Indictment​

An investigation into the mayor’s former buildings commissioner is expected to yield bribery and mob-related charges against several people who helped raise money for Mr. Adams.

A few months before he was elected mayor of New York City, Eric Adams was feted at a $1,000-a-head fund-raiser at Russo’s on the Bay, a plush wedding venue overlooking the water in Howard Beach, Queens. Among the hosts was Eric Ulrich, a city councilman whom Mr. Adams would eventually appoint as buildings commissioner.
Now, at least four hosts of the August 2021 event, including Mr. Ulrich, are under scrutiny, with several expected to face charges stemming from a bribery and organized crime investigation by the Manhattan district attorney’s office, according to several people familiar with elements of the inquiry. It is unclear whether the fund-raiser is connected to the pending charges.
Law enforcement officials plan to announce charges next month against at least five individuals, some of the people said. In addition to Mr. Ulrich, those facing indictment include Anthony and Joseph Livreri, who own a Queens pizzeria that has drawn the attention of prosecutors investigating gambling and organized crime activity.
The Livreris were also hosts of the fund-raiser, as was Michael Mazzio, a towing-company operator and friend of Mr. Ulrich’s who is also under investigation. Law enforcement officials had previously identified Mr. Mazzio and the Livreri brothers as having connections to organized crime.

During the investigation, prosecutors wiretapped Mr. Ulrich’s cellphone, two of the people said. Mr. Adams is not expected to be charged in the case, but he was among those whose conversations were intercepted, the people said.
That Mr. Adams was recorded talking to his buildings commissioner is not in itself unusual, and there is no indication that the mayor’s captured conversations implicated him in any criminal conduct, the people familiar with the inquiry said. The mayor was not listed in the wiretap application as a person of interest.
The expected charges against Mr. Ulrich and the other fund-raiser hosts — and the mayor’s surfacing on a wiretap — are nonetheless the latest examples of Mr. Adams’s tendency to surround himself with friends and supporters tainted by ethical lapses and accusations of criminal conduct.

The criminal inquiry also raises questions about the fund-raiser and the nature of Mr. Adams’s relationship with the event’s 11 hosts, who also included his close confidant Timothy Pearson.

Fabien Levy, a deputy mayor for communications, said that Mr. Adams intends to “allow this investigation to run its course, and will continue to assist the D.A. in any way needed.”

Mr. Levy added that the mayor “has not received any requests from the Manhattan D.A. surrounding this matter and has never spoken to Mr. Ulrich about this investigation.” A spokeswoman for Mr. Bragg declined to comment.

Mr. Ulrich has told prosecutors that the mayor delivered a warning to him about the inquiry, though Mr. Adams has denied doing so or knowing of the investigation before its existence was reported.
Mr. Ulrich and the others who face charges, including a Brooklyn developer, Mark Caller, are expected to be arraigned next month. In recent weeks, a grand jury voted to charge Mr. Ulrich with accepting a discounted apartment from Mr. Caller, who has had business before the Buildings Department, according to two of the people familiar with the investigation. The charges against Mr. Caller are not expected to involve any allegations of involvement in organized crime.

Prosecutors believe that Mr. Ulrich, who resigned in November days after investigators from the district attorney’s office seized his phone, accepted at least some of the benefit while still in charge of the agency.
They are expected to bring additional charges related to organized crime, the people said, although the exact nature of the conduct in question was not clear.

In 2018, the Manhattan district attorney’s office charged Mr. Mazzio and two of his brothers, Salvatore and Angelo, with participating in a violent and illegal towing monopoly. That case is still pending. Law enforcement officials at two separate agencies have asserted that the three brothers and the Livreris have connections to the Gambino crime family.
A lawyer for Mr. Caller, Benjamin Brafman, said there was “no connection whatsoever between Mr. Caller and any of the allegations of organized crime, and I would be shocked if the district attorney suggested otherwise.”

Mr. Brafman said the only allegation against his client relates to the developer’s apartment where Mr. Ulrich still lives. “As I have said previously, it was rented by Mr. Ulrich at market rate well before he became buildings commissioner.”
Mr. Ulrich has had his own connection to the Gambino family, court papers show. In 2014, when he was a Republican City Council member representing the Queens district that includes Ozone Park and Howard Beach, he used his official stationery to ask a federal judge for leniency in the sentencing of a Gambino soldier, William M. Pazienza.
Mr. Pazienza, known as Old Man Willy, had pleaded guilty to racketeering charges in a scheme to recruit women from Eastern Europe to work as dancers at mob-controlled New York strip clubs. His criminal history traced to 1977 and included arrests for promoting prostitution and weapons possession, city records show.

Mr. Ulrich told the judge he had known Mr. Pazienza for seven years and considered him “a personal friend.”

“On more than one occasion, I have witnessed his fatherly-like demeanor and overall good character,” Mr. Ulrich wrote. “In my honest estimation, Mr. Pazienza is a kind person and devoted family man.”
Mr. Pazienza’s son, William Pazienza Jr., a limousine driver, according to campaign finance records, was also a host of the August 2021 fund-raiser for Mr. Adams. Members of the Mazzio family have also donated generously to Mr. Adams, the records show.
A lawyer for Mr. Ulrich, Samuel M. Braverman, has said he would not respond to the allegations against his client before seeing the charges in an indictment. On Friday, he referred to that statement when asked for comment.
Several attempts to reach the Livreris on Monday in person and by phone were unsuccessful; workers at their restaurant and a woman at Anthony Livreri’s house in Queens said they either had no comment or were unavailable.

Mr. Mazzio’s lawyer, James R. Froccaro, said his client “had done nothing wrong, and he absolutely maintains his innocence.”
The mayor has previously shown a willingness to overlook questionable, or even criminal conduct, among his appointees, associates and donors. He tapped Mr. Ulrich to lead the scandal-scarred Buildings Department in May 2022 despite a history of questionable behavior for a person holding a commissioner-level position.
Mr. Ulrich has acknowledged that he once had a drinking problem and is also an admitted gambler. Before he was appointed buildings commissioner, it was widely reported that in 2018, he wrote a letter to a second federal judge on official stationery on behalf of another mob figure: a Bonanno family associate awaiting sentencing on loan-sharking charges.
The case against Mr. Ulrich is one of two Mr. Bragg is overseeing that have reached into the mayor’s inner circle. The other involves an alleged scheme to recruit and reimburse individual straw donors to Mr. Adams’s mayoral campaign to illegally obtain money from the city’s public matching funds program. Dwayne Montgomery, a longtime friend of Mr. Adams’s, is among those charged in the case.
The news organization The City recently identified a number of other questionable contributions to Mr. Adams’s campaign from donors who said either that they did not know who they were donating to or that the donations had been made in their names without their knowledge.
 

David Goldsmith

All Powerful Moderator
Staff member
Another investigation into possible kickbacks.

The Daily Dirt: Adams ally had stint as lobbyist for “real estate concern”​

Analysis of New York’s top real estate news

There is always a real estate angle.

In case you somehow missed it, federal authorities on Thursday raided the home of Brianna Suggs, a campaign fundraiser for Mayor Eric Adams.

They are investigating whether the mayor’s campaign conspired with the Turkish government to receive illegal foreign donations and if it provided kickbacks to Brooklyn-based KSK Construction Group, the New York Times reports. KSK’s website states that it specializes in luxury condo projects.
The extent of the construction company’s alleged involvement is not yet clear, nor are the contours of what the Times suggests is potentially a straw donor scheme.

The initial coverage of the raid caught my attention for obvious reasons, but then I saw this line in the Times story: “State records indicate that a real estate concern hired Ms. Suggs, via an intermediary, to lobby the mayor’s office and the New York City Council on its behalf in 2022.” A real estate concern?

That concern, records show, was the former operator of the East Broadway Mall.
In April, the New York Daily News raised questions about Suggs lobbying the Adams administration while also raising money for his campaign. In August 2022, Suggs signed a contract to lobby on behalf of Terry Chan, the former operator of East Broadway Mall, a Chinatown shopping complex run out of a city-owned building.
Chan wanted the city to renew his lease, but the city reportedly terminated that lease in March, citing millions of dollars in unpaid rent. Since then, the city has tapped a new group, Broadway East Group, led by developer Bill Lam, to gut-renovate and operate the mall, according to the City. The renovation is expected to cost $5 million.

Documented recently detailed the relationship between Winnie Greco, special adviser to the mayor and his director of Asian affairs, and Wade Li, the president of the Chinese Chamber of Commerce of New York, which is also involved in the redevelopment project. The publication reported that Adams’ son, Jordan Coleman, made an appearance with Greco and Li in San Francisco in March and that Li’s restaurant held a fundraiser for Adams in June.
 

David Goldsmith

All Powerful Moderator
Staff member

Who is John Mingione, Nir Meir’s alleged co-conspirator?​

Omnibuild Construction CEO indicted over allegedly false business documents

In the rough-and-tumble world of Manhattan highrise construction, John Mingione has found himself in a high-profile legal scrape.
The 54 year-old CEO of mid-sized Omnibuild Construction was indicted Wednesday, accused of falsifying business records and conspiring to commit felony theft at a luxury condo development formerly known as the XI, now called One High Line, at 76 11th Avenue in West Chelsea.

Mingione pleaded not guilty following a three-year investigation by Manhattan District Attorney Alvin Bragg into possible illegality at the XI project, the ultra-luxury condo development that dealt the death blow to HFZ Capital Group.
“We absolutely maintain our innocence,” said Josh Vlasto, an Omnibuild spokesperson. The construction management firm was indicted alongside Mingione as a defendant in the case, although Omnibuild and Mingione were not accused of profiting from the alleged theft.

“Even though Omnibuild is in the same indictment as HFZ, three counts of that indictment allege that HFZ stole from Omnibuild and others,” Vlasto said. “This is in addition to the three other indictments charging HFZ alone.”
After entering his plea, Mingione was greeted in the hallways of the Manhattan criminal courthouse by an enthusiastic throng of laborers, one of whom wore an Omnibuild polo shirt.
“Let’s go home, John,” one supporter said, before exchanging high-fives. The supporters had arrived at the courthouse in the morning, and returned in the afternoon for his court appearance.
Mingione, who maintains a relatively high public profile, has been interviewed by numerous media outlets. And he didn’t shy away from using his media training following his indictment.
“I want to thank my family, friends and colleagues at Omnibuild for their support and dedication,” Mingione told The Real Deal. “I am so proud of the incredible company we have built together and know that the team will continue to thrive, working hard with our long standing customers, partners and subcontractors.”

The CEO’s alleged co-conspirator was Nir Meir, the embattled former HFZ executive who is accused of having illegally moved money between construction projects in an effort to cover financial shortfalls.
“Champagne taste and beer pockets,” is how Mingione described Meir and HFZ in 2020, after Omnibuild had left the project, disgruntled over poor financial management.
“It doesn’t work,” Mignione said at the time. “Something’s got to give.”

One thing that gave, according to prosecutors, was Mingione.

Facing a $37 million shortfall on the XI project owed to Omnibuild and its subcontractors, Mingione is accused of signing financial documents with inflated subcontractor costs, and of telling a subcontractor to go along with the scheme in order to get paid.
“Besides fighting for owners, he would fight for the subs,” Gandolfo Schiavone, an HVAC subcontractor who worked on the XI, said of Mingione. “The reason why most of the subs that were on that job would go to hell and back for the guy is because he would fight for them.”
Omnibuild placed a $100 million lien on the XI project, citing payment shortfalls by HFZ. The lien was discontinued once a new lender came onto the project, which was completed by developers Steve Witkoff and Len Blavatnik. Omnibuild maintains that it lost millions of dollars on the XI.
Mingione launched his firm in 2007, according to the Omnibuild’s website. In 2010, it began a partnership with Cava Construction, founded by Carmine Della Cava, the driver for the boss of the Genovese crime syndicate in the mid-1980s, when the mafia’s presence in Manhattan’s construction industry was pervasive.
Omnibuild put Della Cava into retirement when it bought the construction firm in 2015.

Today, Omnibuild appears to be on the rise, with Mingione and co-CEO Peter Serpico named among the industry’s most powerful players in 2023.
Still, Mingione’s construction firm has coped with setbacks along the way. Its website lists one of its projects as 644 East 14th Street in the East Village, where neighbors have blamed developer Madison Capital Realty for the displacement of 17 families from an adjacent rent-stabilized building that was deemed unsafe.
Madison Capital claims the damage to the building next door predated its 200,000-square-foot construction project. Omnibuild is not a party to numerous lawsuits launched over the project.
But Mingione has had other legal troubles. Before he founded Omnibuild, Mingione was a member of the city’s carpenters union. In 2002, he pleaded not guilty in a conspiracy case brought by Attorney General Eliot Spitzer. Mingione was convicted for a scheme that allowed nonunion contractors onto union job sites, and deprived the carpenters union of $1 million in retirement contributions.
 
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