Construction Firm Guilty of Record Fraud

A federal prosecutor announced Tuesday afternoon that Lend Lease Construction has agreed to a pay up to $56 million in penalties for a decade-long overbilling scheme on a number of projects across the city. As a result of its admission of guilt, the company formerly known as Bovis Lend Lease will avoid prosecution. It is seen as the largest construction fraud settlement in the city's history.

Additionally, James Abadie, the former principal in charge of Bovis' New York office, pleaded guilty to conspiring to commit mail and wire fraud. Mr. Abadie faces up to 20 years in prison and a fine of at least $250,000.

The penalties will go toward the federal government and restitution to victims. The company also agreed to implement far-reaching corporate reforms designed to prevent future fraud and to promote best practices.

For a ten year time span ending in 2009, the company along with others devised a scheme to defraud federal, state and local government contracting agencies as well as private clients. The company intentionally and fraudulently billed clients for hours that were not worked by labor foremen from Local 79. They did so by “falsely representing in billing requisitions, certified payrolls and other documents submitted by Bovis,” according to federal investigation documents. In the settlement, Bovis admitted to these practices.

Bovis was one of the largest construction companies in the city. Three years ago it boasted 1,000 employees here. It also worked on a number of big projects across the city as a construction manager. Among them were Citi Field, the renovation of Grand Central Terminal and the Deutsche Bank building demolition.