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Three Convicted In Brazen CityTime Fraud Scandal
By
Jen Chung
Published Nov 23, 2013
Modified Nov 23, 2013
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NYC Mayor's Office
By
Jen Chung
Published Nov 23, 2013
Modified Nov 23, 2013
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Ah, CityTime. The corruption connected to the Bloomberg-endorsed city automated payroll project, which was supposed to cost $63 million but ended up costing $700 million and is considered a bigger scandal than Boss Tweed, has now netted three more convictions, including a man who got $30 million in kickbacks.
Mark Mazer, considered the mastermind of the scheme, was accused of lining his own pockets when he allegedly created numerous shell companies to move various city contracts through and leech from them. As the Daily News reports, "The city hired Mazer, 50, as a consultant in 2004 to streamline and rescue the computer project, but he and his cohorts weren’t sated by their hefty salaries. Mazer funneled millions of dollars stolen from the city to bank accounts overseas. Investigators found hundreds of thousands of dollars stashed in safe-deposit boxes around the city that were part of the ill-gotten gains."
Still, Mazer's lawyer, Gerald Shargel, insisted that his client was innocent, "There was an incredible amount of checks and balances. There was an incredible amount of supervision and independent examination."
Mazer was convicted of wire fraud, bribery, money laundering and other charges and faces life in prison. The program manager for one of the contractors, Gerald Denault, was also convicted of wire fraud, money laundering and other charges while Mazer's uncle, Dimitry Aronshtein, was convicted of bribery and money laundering; they face 20 years in prison. All three will appeal the convictions.
City Comptroller John Liu, a vocal critic of the program, said, "These verdicts send the right message to all who would think of defrauding our taxpayers that there will be a heavy price to pay. Let the CityTime scandal also serve as a sobering reminder that City Hall must tightly manage outside consultants, because when projects run years late and over budget by 1,000 percent, criminality on top of massive waste becomes that much less surprising."
And U.S. Attorney Preet Bharara said, "The jury has found what this Office alleged from the outset: these defendants were at the heart of a conspiracy to steal from New York City and its taxpayers. Awarded a lucrative contract to design a streamlined payroll system for the City, instead they built a money-making machine for themselves. These three defendants and their partners in crime thought they had made off with nearly $100 million in taxpayer money, far more than they could have made by burglarizing banks, with a fraction of the effort. What they now stand to reap is lengthy prison terms.”
Bloomberg said, "We’ve had zero tolerance for corruption, and it’s why we have run the cleanest administration in New York City’s history." But he also said earlier that the whole fraud was great because we got $500 million back.
Tagged
citytime
conviction
corruption
mark mazer
mayor bloomberg
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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