Friday, August 1, 2014
NEW YORK (AP) — The Canadian owner of a company that won nearly $1 billion in contracts to provide steel for the construction of the World Trade Center's tallest building and a transit center was arrested Thursday on charges he defrauded a program meant to benefit minority- and women-owned businesses.
Larry Davis, 63, of Mississauga, Ontario, Canada, was freed on $100,000 bail after surrendering in the afternoon.
Davis, president and chief executive officer of DCM Erectors Inc., was charged with wire fraud and conspiring in a scheme to cheat a program that provided contracts to minority- and women-owned businesses.
His lawyer, Sam Talkin, said in court that his client "wants to fight these charges."
He added: "He is looking forward to his day in court."
Davis agreed to sign waivers of extradition so he can travel between New York and his home in Canada.
Talkin said Davis and his company have known since late 2011 about the investigation.
"Now there's an opportunity to fight back and defend ourselves," he said in an interview.
Assistant U.S. Attorney Carrie H. Cohen told U.S. Magistrate Judge Debra C. Freeman that the government will bring additional charges in an indictment that will accuse Davis of fraud related to other construction projects.
Prosecutors said they have already secured guilty pleas from two individuals who assisted Davis in the fraud.
U.S. Attorney Preet Bharara said Davis secured contracts that came with a responsibility to boost the role of minority- and women-owned businesses.
Instead, the prosecutor said in a release, Davis "committed fraud by claiming that work was going to minority and women-owned businesses when it was not. Davis allegedly tried to cheat the system and deserving businesses out of work."
Port Authority Acting Inspector General Michael Nestor said the fraud was detected by an integrity monitor from his office.
Shantelle P. Kitchen, acting special agent-in-charge of the New York Office of the Internal Revenue Service, said the investigation "uncovered schemes that, for years, exploited a program designed to encourage minority and women-owned business to participate in Port Authority projects."
According to court papers, Davis from 2009 through 2012 caused false payroll records to be sent to the Port Authority of New York and New Jersey.
The government said DCM, which Davis has owned since at least 1999, was awarded a $256 million contract in 2007 to work on the trade center building and a $330 million contact in 2009 to help construct the transportation center next to it. Prosecutors said changes in the scope of the work boosted the value of contracts to nearly $1 billion.
The program to benefit minorities and women requires contractors to make good faith efforts to enter into subcontracts worth at least 17 percent of the overall contract with businesses owned by women and minorities.
Prosecutors said guilty pleas were previously entered by Johnny Garcia, 48, of Ossining, N.Y., and Gale D'Aloia, 66, of Charleston, S.C. The government said Garcia has agreed to forfeit $669,000 and D'Aloia will forfeit $575,000. Both are awaiting sentencing.