Dive Brief:
- A Staten Island, NY, contractor has been indicted in Brooklyn Supreme Court for allegedly offering a School Construction Authority (SCA) project officer a total of $3,500 to speed up payments on a $2.5 million renovation contract for P.S. 138K, according to the Staten Island Advance.
- Abdulkader Kassem Elchoum, owner of AMA Construction/NY, Inc., allegedly first offered the SCA officer $2,000 to speed up a $163,000 payment, then $1,500 more over the next two months to expedite additional payments. The SCA officer reported the first bribe and accepted payment as part of an investigation by the SCA’s Inspector General and the city Department of investigation.
- Elchoum faces six counts of third-degree bribery and a potential sentence of seven years in prison if he is convicted.
Dive Insight:
Elchoum, whose company’s contract included a new corridor, a fire alarm upgrade, and heating, ventilation and air conditioning work, was the low bidder on the public school project, according to prosecutors.
"This indictment shows our commitment to root out and prosecute public corruption in Brooklyn," Brooklyn District Attorney Kenneth Thompson said in a statement. "It also serves to put construction companies awarded city contracts on notice that we will fully investigate and prosecute any acts of bribery."
This is just one incident of many dealing with corruption on publicly funded construction projects. In August, the New York City District Attorney announced the creation of a Construction Fraud Task Force that would identify and prosecute corruption in New York City’s construction industry.
The harsher penalty trend has hit contractors across the country. Government contractor KBR, Inc. was recently fined $108,000 for accepting subcontractor kickbacks, and this month a Navy contractor was indicted for falsely certifying that he had paid contractors when he actually pocketed the money instead.
A Minnesota contractor is under federal investigation for wire fraud, bankruptcy fraud, tax fraud and money laundering after pleading guilty to forging construction bonds so that his company could win contracts for government projects. And three executives in Pennsylvania recently pleaded guilty to falsely claiming to be a disadvantaged business enterprise in order to win millions of dollars in transportation contracts.
