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Over the last two years, several engineering firms signed deals with Manhattan District Attorney Cy Vance Jr. to pay nearly $7 million after their executives were charged in a wide-ranging construction bribery scheme.
Now all of those forfeiture agreements are up in the air as Vance examines allegations that the prosecutor leading those cases deliberately withheld evidence favorable to the defendants, THE CITY has learned.
The revisiting of the big-money deals marks the latest development in the ongoing prosecutorial misconduct inquiry into outgoing Assistant District Attorney Diana Florence, until recently one of Vance’s top deputies.
Florence resigned last month and was replaced as the head of Vance’s Construction Fraud Task Force after the allegations surfaced. She was the lead prosecutor in the multi-defendant construction bribery case, bringing criminal charges against four firms and their executives, and seeking a nonprosecution deal with a fifth firm.
Vance is now reviewing all of the cases — and “the civil [forfeiture] resolutions are part of the pending review,” his spokesperson, Emily Tuttle, confirmed to THE CITY.
All of that forfeiture money ends up with the law enforcement agencies that brought the case, including the Manhattan DA’s Office.
Over the last several years, Vance has accumulated tens of millions of dollars in forfeiture funds — far more than any other DA in the city — via settlements with various corporate entities, including several big banks charged with fraud.
According to the latest available disclosure forms, Vance reported having $222 million in forfeiture money as of June 30, 2018. He distributed some to other law enforcement agencies, and spent some on training, investigations and pricey travel.
A ‘Personal Swamp’
The bribery cases that would generate more millions for the DA’s forfeiture account were announced by Vance at a news conference in April 2018 with Florence at his side.
Indictments alleged four firms illegally obtained millions of dollars in government water system contracts by bribing a mid-level city bureaucrat for confidential information during the bidding process.
Vance portrayed the companies as benefitting handsomely by engaging in under-the-table payouts, asserting that “a handful of industry players transformed our city’s water infrastructure procurement process into their own personal swamp.”
All told, Vance and Florence said the tainted contracts totalled $177,609,293 over 10 years. Vance’s Asset Forfeiture Unit then filed civil lawsuits against the firms, demanding that they repay the full value of all the contracts. They called this money the “proceeds of crime.”
The amounts were enormous.
HAKS Engineers, Architects and Land Surveyors, for instance, had won five contracts worth $71.4 million. D&B Engineers & Architects notched 11 contracts worth $73 million. Haider Engineering secured two contracts worth $12.8 million.
Simco Engineering, not a minority-owned firm, engaged in a scheme to win 28 subcontracts worth $11.7 million posing as a minority-owned firm, prosecutors charged.
Soon all four firms were trying to negotiate lower payments, agreeing to hire “integrity monitors” to oversee their procurement practices going forward. They each signed off on deferred prosecution agreements that would result in all charges erased after three years, in exchange for various forfeiture payments.
HAKS, now called Atane Consulting, agreed to pay $3 million after two of its executives pleaded guilty to bribery charges. D&B agreed to pay $1.8 million even before its president was found guilty of bribery in a nonjury trial. Simco and Haider agreed to pay $1 million each after their owners pleaded guilty to bribery charges.
D&B and Haider have already turned over a total of $2.1 million. Haks and Simco were scheduled to begin paying in the coming months.
Firms Looking for Reliefs
Now all four are in talks with the DA about whether the prosecutorial misconduct allegations negate the deals. In the end, the money could wind up being sent back to the firms that already have written the checks, with the rest of the agreed-upon payments cancelled.
John Martin, an attorney for Simco, said Vance’s internal investigation will ultimately determine how much — if anything — the firm will have to pay.
“It’s going to depend on how they deal with each individual,” he said. “The company is hopeful. Whether they get released from it or not, they’re hoping for some relief.”
Anthony Capozollo, attorney for D&B Engineers, which the DA’s office said has to date paid $1.1 million of the $1.8 million in forfeiture it owes, said only, “We’re talking with the DA about whatever implications the public revelations have for our client.”
Michael Scotto, an attorney for Haks, would not discuss how the misconduct investigation might affect the firm’s deal to pay $3 million in forfeiture, except to say “we’re in a dialogue with the DA’s office.”
A fifth firm, the Kansas-based Black & Veatch, worked with the DA to hammer out a nonprosecution agreement after one of its vice presidents was charged with bribery. Charges against that executive, Kyriacos Pierides, were dismissed by a judge last month due to the misconduct accusations.
On Tuesday, Andrew Lankler, an attorney for Black & Veatch, declined to discuss details of the arrangement, including any forfeiture payments.
A Telltale Interview
A shadow was cast over cases by revelations about Florence’s star witness, a city Department of Environmental Protection procurement staff employee named Ifeanyi “Manny” Madu.
Madu claimed the firms’ executives purchased his insider knowledge with lavish restaurant meals, Broadway tickets and jobs for a subcontracting companies he controlled.
But in 2015 — when the investigation into the case was just starting — Madu told the city Department of Investigation under oath that he had never received a bribe or anything of value from any engineering firm.
Florence did not turn that interview over to the defendants until last month, along with more than 135,000 emails from Madu that she said were recently discovered. By then, three of the executives had pleaded guilty and one had been found guilty after a nonjury trial that featured Madu’s testimony.
She contends she only recently learned of the DOI interview with Madu. As THE CITY reported last week, the DA’s Office said the tape of the interview was downloaded to its computer system in 2017.
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