By: Daniella Gordon and Jennifer M. Horn
Several top New York construction companies have been served with federal subpoenas seeking information regarding their billing practices in connection with New York public works projects. Skansa USA Building, Inc., Turner Construction Co., Plaza Construction and Tishman Construction Group were among the construction firms served with information subpoenas. The status of the federal inquiry, and whether an official investigation will result, is currently unknown.
The probe comes in the wake of the federal prosecution of one of New York’s top construction firms Bovis Lend Lease, now known as Lend Lease Project Management and Construction. Deceitful billing practices, including rigged contract bids, misrepresentation regarding the participation of minority firms, inflated bills and no-show jobs emerged as critical areas of inquiry in the Bovis prosecution. Ultimately, as a result of the prosecution of Bovis and certain employees, Bovis agreed to pay the Government $56 million dollars in restitution and fines in July of 2012. Ironically, one of the projects for which Bovis was alleged to have committed acts of fraud involved the construction of the Bronx Criminal Courthouse.
The prevalence of fraudulent bidding and billing practices on public construction projects appears to be a growing concern for federal and local legislative and enforcement bodies in the wake of the economic downturn. It remains to be seen whether the Government’s actions will have the desired deterrent effect.
Daniella Gordon is a litigation Associate in the Construction Group. She represents clients in a wide range of construction-related matters, including public bidding contests, construction defect claims, and appeals.
Jennifer M. Horn is Senior Counsel at Cohen Seglias and a member of the Construction Group. She concentrates her practice in the areas of construction litigation and real estate.