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Want $460 Million? Just Get NYC Gov't Contract And Steal It!
By
Jen Chung
Published Jun 21, 2011
Modified Jun 21, 2011
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By
Jen Chung
Published Jun 21, 2011
Modified Jun 21, 2011
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Last December, it seemed pretty bad when consultants for the city's payroll system, CityTime, were charged with stealing $80 million from the bloated project (CityTime was supposed to save the city $60 million but it ended up costing $722 million extra). But now the U.S. Attorney says that the major contractor for the project has basically stolen $460 million in city money and the company's owners are now in India, after fleeing a grand jury subpoena.
U.S. Attorney Preet Bharara said yesterday, "We have developed evidence that the corruption on the CityTime project was epic in duration, magnitude, and scope. As alleged, CityTime served as a vehicle for an unprecedented fraud, which appears to have metastasized over time." The sub-headline for the press release (PDF) is, "Alleged Criminal Scheme Extended Across Virtually Every Level Of CityTime Project; Contractors And Subcontractors Systematically Inflated Costs, Overbilled For Consultants’ Time, And Artificially Extended Completion Date."
The Daily News' Juan Gonzalez, who has been following the slow-boiling scandal for years, describes the errant owners of contractorTechnoDyne: "Reddy Allen and his wife, Padma, once were rising stars in the world of computer consulting... TechnoDyne grew so rapidly that NJBiz dubbed it the No. 2 minority-owned firm in that state. Accounting giant Ernst & Young even honored Padma Allen as entrepreneur of the year last year. Today, the Allens are fugitives. They flew to their native India a few weeks ago, soon after federal prosecutors subpoenaed them to appear before a grand jury... On the night of May 31, employees of TechnoDyne learned by email their firm had closed its doors, effective that day. When they tried to retrieve their final paychecks the next day, the employees were stunned to learn that the Allens had removed everyone from the payroll in mid-May."
The U.S. Attorney is trying to get the Allens extradited. In the meantime, another consultant on the project has agreed to plead guilty and cooperate with prosecutors.
Tagged
city consultant
city contractor
citytime
fraud
payroll
technodyne
theft
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
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