After a wide ranging investigation by Federal Authorities, one of the world’s largest construction firms, Lend Lease, formerly (and commonly known as) Bovis Lend Lease, was fined $56 million for fraud perpetrated on projects ranging from Federal, State, City, County and private projets.
The fine was levied after intense negotiations permitted the company to escape Federal prosecution for the fraud, which extended over a 10-year period, including over-billing and ignoring minority hiring mandates at New York landmarks, such as the Mets’ baseball stadium and the September 11 memorial site. FBI assistant director-in-charge Janice Fedarcyk said the plea concluded a three-year probe ”into a systemic pattern of audacious fraud by one of the world’s largest construction firms”.
Bovis is the construction arm of Australian based Lend Lease, and is the entity that agreed to pay the fines, which included ‘victim restitution.’ A hearing was held on April 24, 2012 in the US District Court in Brooklyn, NY, at which point the fine was levied by the court. Accused of fraudulent overbilling and manipulating minority hiring program requirements, the US Attorney Loretta Lynch indicated that the main defense given by Bovis was that “everybody does it”. US Attorney Lynch states that “the defense of ‘everyone does it’ will not be a shield against law enforcement.”
As for corporate employees and officers, only one was charged with fraud. James Abadie, who formerly led the company’s New York office, pleaded guilty to conspiring to commit fraud for over-billing Bovis’ clients for more than a decade. Abadie, 55, faces up to 20 years in prison. It’s interesting that only one person was indicted for “conspiracy”: we thought it took more than one person to make a conspiracy. Bovis, on the other hand, is on a 2 year good behavior stint and may be prosecuted if it violates laws during that time period.
In a nutshell, the company admitted that, as a matter of practice, it added two hours of unworked overtime to timesheets for labour foremen and charged customers for weeks when foremen were on vacation or out sick. Court papers indicated this is a common and unsavory practice where unions have heavy influence on the number of hours worked by their members and work slowdowns can severly affect a project.