Dive Brief:
- The Manhattan District Attorney’s Office has added five new state and federal agency partners to its Construction Fraud Task Force, which investigates and prosecutes corruption and fraud in New York City’s construction industry.
- The state’s Department of Labor, the New York State Insurance Fund, the state Office of the Inspector General, OSHA and the Wage and Hour Division of the federal Labor Department will join the Task Force, District Attorney Alvin Bragg Jr.’s office announced last week.
- Formed by the DA’s office in 2015, the task force’s partners “investigate criminal health and safety lapses in the construction industry, including worksite fatalities and safety hazards, and issues of construction corruption and fraud in the New York City metro area,” the announcement states.
Dive Insight:
The new additions join original task force members:
- The New York City City Department of Investigation.
- The Port Authority of New York and New Jersey Office of the Inspector General.
- The MTA Office of the Inspector General.
- The Business Integrity Commission for the City of New York.
Agencies in the task force meet monthly to investigate crimes in the industry, while also recommending reforms and public policy to address systemic problems in construction.
“Construction fraud can fleece the public, hurt law-abiding business owners and endanger the lives of workers,” Bragg said in the announcement. “The expansion of the Construction Fraud Task Force demonstrates the seriousness of our commitment to rooting out illegal activity and creating a safe and fair industry.”
Since 2018, the Task Force has recovered over $6 million in stolen wages, according to the announcement.
Recent Manhattan case
The same day as the task force announcement, Bragg announced two indictments for Steven Lyon, a certified public accountant in Edgewater, New Jersey, for allegedly defrauding the state insurance fund out of over $10 million in workers’ compensation premium payments.
Lyon reportedly doctored payroll documents for workers on scaffolding companies. He faces three counts of first degree insurance fraud, five counts of second degree insurance fraud, eight counts of first degree falsifying business records and nine counts of second degree forgery in a New York State Supreme Court indictment.
The charges state that from March 2018 to March 2020, Lyon allegedly filed false documents, reducing the payroll size of ANAAR Construction & Contracting Corp. of Queens, New York, owned by Sadaf Bhatti. As a result, ANAAR underpaid NYSIF by over $1.4 million.
ANAAR Construction and Bhatti also face charges for fraud, falsifying records and forgery.
In a separate case, Lyon was arraigned in January in the state Supreme Court for similarly defrauding the state insurance fund. Defendants in that case — Long Island City-based masonry subcontractor Oneteam Restoration Inc. and owner Mario Rojas Jr. — each pleaded guilty May 4 to one count of first degree falsifying business records. They were sentenced to three-year conditional discharges.
The case against Lyon for that alleged fraud scheme remains open. Construction Dive could not locate contact information for Lyons nor his attorney.