An affidavit filed in federal court in Brooklyn suggests that officials with the Schiavone Construction Company, a contracting giant working on some of the largest public works projects in New York City, were involved in variety of schemes involving organized crime in recent years.
The affidavit, filed in 2005 as part of an organized crime investigation that has led to scores of arrests, says that Schiavone executives plotted to evade a requirement that they seek to hire businesses owned by women on a city project by using a front that was actually meant to funnel money to a mob-connected trucking executive.
In the affidavit, a federal agent, citing secretly recorded tapes of Schiavone officials and statements by the trucking executive, details the steps Schiavone officials said they would take to help carry out the scheme.
They included an offer by senior Schiavone executives to hire a secretary and install a telephone line at the front company’s offices just for Schiavone projects. Another Schiavone employee was recorded saying that he would provide signs bearing the front company’s name to mask the ownership of the mob-connected trucks, and heard coaching the trucking executive on how to file job paperwork. Another employee was recorded telling the trucking executive that a woman should answer the phone at the front company’s job-site trailer, and directing how she should greet callers.
Schiavone, which was formed in the 1950s and grew into one of the largest heavy-construction companies in the New York area, has been awarded more than $2 billion in public works projects in recent years, including New York City’s massive Croton water filtration plant in the Bronx, said to be the subject of the fraud scheme. Work on the construction of the Second Avenue subway is another of its projects.
Until the company was sold to a Spanish conglomerate late last year, 50 percent of it was owned by Raymond J. Donovan, the labor secretary in the Reagan administration. He was tried and acquitted in 1987 on state fraud charges that accused him of stealing $7.4 million from a subway contract through a scheme involving a Genovese crime family associate and a minority-owned subcontractor.
The 2005 affidavit quotes Nicholas Calvo, a carting company executive identified by prosecutors as a Genovese crime family associate, telling a union official that Schiavone Construction had ties to the Genovese family.
Mr. Calvo told the union official that he had obtained work for another trucking company at the New York City Water Tunnel No. 3, another massive project where Schiavone holds a city contract, through his influence over Schiavone, according to the affidavit. Mr. Calvo, who was arrested earlier this year in the broader organized crime investigation, pleaded guilty this month to extortion conspiracy charges in United States District Court in Brooklyn.
No charges have been brought against Schiavone Construction or the officials implicated in the scheme detailed in the affidavit, although its head of tunneling operations, Anthony Delvescovo, and a lower-level worker, Michael King, were among 62 people indicted in the broader investigation.
The affidavit, which was originally filed under seal, was disclosed last week by Dominic F. Amorosa, a lawyer for one of the defendants in the broader case, who attached it to another document he filed seeking to have wiretap evidence against his client suppressed.
Schiavone’s general counsel, Mary Libassi, said in a written statement on Monday that some of the affidavit’s allegations against Schiavone were untrue, and that the company was cooperating with the investigation, which is being overseen by the United States attorney in Brooklyn.
“Schiavone has operated and continues to operate within the law,” she said. “In its projects, Schiavone has used appropriately certified minority, women’s and disadvantaged business enterprises.”
Of the 62 people charged in the broader case, just Mr. Delvescovo and Mr. King were indicted on charges related to Schiavone. Fifty-three of the defendants have either pleaded guilty or have agreed to, and nine — including the two men — are expected to go to trial in the coming months.
Mr. Devescovo’s lawyer, Avraham C. Moskowitz, said his client was not recorded once on the hundreds of hours of tapes made by the trucking executive. “And that, in and of itself, should cast doubt on the government’s case,” he said. “There is no evidence that my client got a penny from anybody.”
Mr. King’s lawyer, Marc A. Agnifilo, defended his client and played down his role in the case, saying he operated a jackhammer and had “almost no decision-making authority whatsoever.”
It is unclear from the affidavit whether the scheme was ever carried out. But city records show that T & M Maintenance, the company listed in the affidavit as the front in the supposed scheme, was a subcontractor to Schiavone on the Croton water filtration plant project, doing $1.2 million in work.
The company is listed in city records as a certified Women’s Business Enterprise and a Minority Business Enterprise.
The affidavit said that the mob-connected trucking executive who was part of the scheme, Joseph Vollaro, had met with Schiavone executives about the plan while he was cooperating in the investigation with federal and local authorities.
“Certain of the executives have instructed the CI that the CI is to perform the work at the Croton Project under the guises of a company portraying itself as a legitimate women’s business enterprise,” the affidavit said, referring to Mr. Vollaro by the abbreviation for his role as a confidential informant. “In fact, the executives understand that the CI’s company will be doing the work.”
Under a state program, Schiavone was required to make a “good-faith effort” to subcontract at least 17 percent of the work to minority companies and 5 percent to companies owned by women.
The affidavit said that Mr. Vollaro had agreed with the president of T & M, Marina Poetsma, to pay her a fee of 7 percent of the contract payments to use her company’s name. Mr. Vollaro’s company was to keep the remaining 93 percent, according to the affidavit, which did not include the total dollar amount of the payments.
A man who answered the phone at T & M’s offices on Staten Island said that the company and Ms. Poetsma had done nothing wrong. “Whatever she did, it was all legal,” said the man, who would not give his name. “You wouldn’t be awarded a contract otherwise. Don’t believe everything you read,” he added, referring to the affidavit. “The City of New York is not stupid.”
The affidavit was sworn to by Jonathan Mellone, a special agent with the federal Department of Labor’s Office of the Inspector General, which is investigating the case along with the F.B.I., the state Organized Crime Task Force, the city Department of Investigation and federal prosecutors. It also described several other schemes involving Schiavone.
Among them were instances of bribes and kickbacks, and a scheme in which Mr. Vollaro was to pay $40 a truck load — including all the loads from the Schiavone jobs — for unlimited access to a landfill project in New Jersey known as Endcap.
Mr. Vollaro’s criminal record dates to a 1989 drug conviction in New Jersey. He also served a federal prison sentence for loansharking. He began cooperating with investigators in early 2005 when they caught him with a kilogram of cocaine.
The Croton project, at the center of the alleged scheme involving Schiavone and T & M, is a massive, controversial undertaking by the city’s Department of Environmental Protection, which has been plagued by delays and by costs that have soared to nearly $3 billion from $660 million.
One of the biggest water filtration plants in the world, it is being built in a 10-story hole that Schiavone helped excavate out of bedrock in the Bronx. Once entombed in the man-made cavern below Van Cortlandt Park, it will be able to filter 300 million gallons of water a day.
Thanks to William K. Rashbaum
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