Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Construction service company owner pleads guilty to conspiracy to defraud New York Power Authority, (Jun 9, 2015)

By Linda O’Brien, J.D., LL.M.

The owner of a New York construction service company has pleaded guilty to conspiring to defraud the New York Power Authority (NYPA) and filing a false tax return, the Department of Justice (DOJ), Internal Revenue Service, and New York State Inspector General jointly announced on June 8.

In a two-count felony charge filed in U.S. District Court of the Southern District of New York in White Plains, Thomas Delaney, owner of Bardonia, New York based Over Rock Construction LLC, was charged with participating in a scheme to defraud the NYPA. In October 2009, Over Rock was awarded a five-year $3 million contract to perform landscaping, snow removal and masonry work at NYPA’s administrative facility in White Plains.

According to court documents, Delaney, with the assistance of his co-conspirators, submitted fraudulent certified payroll statements and invoices to NYPA for reimbursement for individuals who performed no services (“no show” employees) on behalf of Over Rock at NYPA in order to generate cash for those involved in the scheme. Between 2009 and 2012, the false and fraudulent overcharges paid by NYPA to Over Rock totaled more than $400,000. Delaney also pleaded guilty to filing a false and fraudulent tax return which substantially understated his income.

“The defendant cooked the books twice – first so he could defraud the New York Power Authority and then again to avoid paying taxes he owed,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The division will continue to work with our partners at the FBI, IRS and the New York Inspector General to bring to justice those who corrupt a public bidding process for their own personal gain.” ?

Delaney pleaded guilty to a fraud conspiracy charge that carries a maximum penalty of 20 years in prison, three years of supervised release and a $250,000 fine. Delaney also pleaded guilty to subscribing to a false tax return, which carries a maximum penalty of three years in prison and a $100,000 fine. The maximum fines for each of these charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The charges arose from an investigation initiated by the New York State Inspector General and were part of an ongoing joint federal and state investigation of bid rigging, fraud and tax-related offenses in the award of contracts at NYPA’s facility in White Plains.

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