Manhattan District Attorney Alvin L. Bragg, Jr., New York City
Department of Investigation (“DOI”) Commissioner Jocelyn Strauber, and
NYPD Commissioner Keechant L. Sewell today announced the indictment of
24 individuals and 26 companies for a wide-ranging construction industry
kickback scheme that corrupted the competitive bidding process for
dozens of contracts over more than 8 years. Led by ROBERT BASELICE
(known professionally as Robert Basilice), 51, in conjunction with
associates including LOUIS ASTUTO, 58, PAUL NOTO, 43, and FRANK CAMUSO,
59, the alleged scheme resulted in the theft of more than $5,000,000
from BASELICE’s firm’s clients.
The 83-count New York County Supreme Court indictment charges all 50
defendants with Conspiracy in the Fourth Degree. The defendants also
face varying charges of Grand Larceny in the First, Second, and Third
Degrees, Commercial Bribing in the First Degree, Commercial Bribe
Receiving in the First Degree, Donnelly Act violations (bid-rigging),
and Money Laundering in the Second and Fourth Degrees.
“When the bidding process is rigged, we all lose,” said District Attorney Bragg. “The
market suffers from a lack of quality competition, developers are
prevented from hiring the best companies at fair prices, and –
importantly – honest, law-abiding companies are pushed out by those that
broke the law. I hope this indictment sends a message that the
Manhattan D.A.’s Office and our partners at the DOI and NYPD will not
tolerate bribery, corruption, or fraud. We will use our combined
expertise and resources to ensure free competition and a fair market.”
DOI Commissioner Jocelyn E. Strauber said, “Bribery
and kickbacks should not be costs of doing business in this City. As
charged, Robert Baselice and his co-defendants conspired with
subcontractors to inflate their bids for work on construction projects,
in a pay-to-play scheme that lined the defendants’ pockets at the
expense of developers. This Indictment shows that construction firms in
this City must operate with honesty and integrity or face the
consequences. I want to thank the prosecutors from the Manhattan
District Attorney’s Office and investigators from the NYPD and DOI who
collaborated to bring these important charges.”
“BIC applauds DANY, DOI, and the NYPD for their work on this case,” said BIC Commissioner and Chair Elizabeth Crotty.
“This investigation demonstrates the commitment of law enforcement to
root out criminality and organized crime in the construction industry,
as well as the importance of interagency collaboration to maintain
public safety. Fraud and anticompetitive business practices that harm
New Yorkers will not be tolerated.”
“Over a period of more than eight years, these defendants stole
millions of dollars through their criminal behavior, fraud, and
corruption,” said NYPD Commissioner Keechant L. Sewell.
“The NYPD and our law enforcement partners will continue to
aggressively pursue anyone who seeks to betray the public’s trust for
profit, and we will hold them fully accountable for their actions. I
want to thank and commend the Office of the Manhattan District Attorney,
the New York City Department of Investigation, and everyone who worked
on this important case.”
The indictment was the result of a joint investigation by the
Manhattan D.A.’s Office’s Rackets Bureau, DOI, and the NYPD Criminal
Enterprise Investigative Section.
According to court documents, as a Vice President of a construction
management firm, BASELICE had authority over the firm’s subcontractor
bidding process. In this position, BASELICE was responsible for
providing developers with truthful and accurate information and acting
in their best interests on properties that included some of the most
significant high-rise construction projects in Manhattan, including: 11
Stone Street (the FiDi Hotel), 12 East 48th Street (Hilton Club The Central at 5th New York), 75 Kenmare Street, 101 West 28th Street (the Remy), 106 West 56th
Street (the Six office building), 189 Bowery (the citizenM New York
Bowery Hotel), 250 Fifth Avenue (the Fifth Avenue Hotel), and 396
Broadway (the Walker Hotel Tribeca).
Instead, from April 2013 through July 2021, BASELICE used his position to steal from his firm’s developer clients by:
- Directing his project team to include specific co-conspirator subcontractors on project bidder lists,
- Providing inside information about competitors’ bids to co-conspirator subcontractors, and
- Directing the co-conspirator subcontractors to raise their bids to a
dollar amount that included a kickback for BASELICE, room to negotiate
with the developers, and as much profit as possible within the
developers’ budgets.
BASELICE then lobbied developers on behalf of the co-conspirator
subcontractors and participated in the final negotiations, including
pretending to strong-arm the subcontractors to lower their price – in
what he referred to as his “dog and pony show” – in a false display of
loyalty to the developers. Developers were unlikely to reject BASELICE’s
recommendations for subcontract awards because if they did, they bore
the risk of any subsequent cost overrun.
In exchange for manipulating the bidding process to benefit certain
subcontractors, the subcontractors paid kickbacks to BASELICE, his
company DVA GROUP, LLC, and other companies, including those owned by
ASTUTO and NOTO. ASTUTO and NOTO then distributed a portion of the
proceeds to companies owned by CAMUSO and his family. In total, the
subcontractors paid more than $4,200,000 in kickbacks to BASELICE (and
companies and individuals related to him) and more than $2,800,000 in
kickbacks to companies controlled by BASELICE’s associates, including
ASTUTO and NOTO.
Though this corrupted bidding process, the conspirators stole from
the developers by purposefully inflating subcontracts and knowingly
charging higher prices. BASELICE also recommended change orders for the
co-conspirator subcontractors after they were hired, generating
additional income for the subcontractors and additional kickbacks to
BASELICE. In total, the defendants stole more than $5,000,000 from the
developers over the course of the conspiracy.
As a result, subpar work was sometimes completed by unqualified
subcontractors and developers complained. In one instance, HVAC firm TRV
Mechanical Contractors, Inc., had only done work on smaller residential
jobs and was tasked with installing a heating and cooling system for
The Remy, a 32-story condominium tower in Chelsea.
In another project, Earth Structures, Inc., was hired to pour
concrete foundations for the Fifth Avenue Hotel and Hilton Club The
Central at 5th New York, but had to be taken off both projects when they
took payment from developers but failed to pay their vendor bills.
For a summary of the allegations against the 24 individuals and 26
companies charged within the indictment, please see the Statement of
Facts here.
Assistant D.A.s Meredith McGowan, Guy Tardanico, and Jaime
Hickey-Mendoza are handling the prosecution of this case under the
supervision of Assistant D.A.s Michael Ohm, Deputy Chief of the Rackets
Bureau; Judy Salwen, Principal Deputy Chief of the Rackets Bureau; and
Jodie Kane, Chief of the Rackets Bureau; as well as Executive Assistant
D.A. Christopher Conroy (Senior Advisor to the Investigation Division).
Forensic Accounting Investigator Reginal Lau; Former Assistant D.A.
Brian Foley; Trial Preparation Assistants Eleanor Bock, Rachel Broomer,
Benjamin Karam, Violet Michel, Shriya Shinde, and Srivatsan
Senthilkumar; former Trial Preparation Assistants Annie Bell, Matthew
Ender-Silberman, Madeleine Lippey, Emma Olcott, Alex Prior, Morgan
Spencer, and Elena Syman; Data Specialist Olivia Savell; High Technology
Analysis Unit Director Steven Moran, Supervising Investigator Lawrence
Hayes, and Analyst Boris Vestfrid; and retired Financial Investigators
William Tamparo and Michael Kelly assisted with the investigation.
D.A. Bragg thanked the New York City Department of Investigation, in
particular Assistant Inspector General Dan Taylor, Chief Investigator
James McElligot, and Inspector General Gregory Cho; and the NYPD
Criminal Enterprise Investigative Section, in particular retired
Detectives Nicholas Lagano and Ignazio Conca; Detective Jose Ortiz,
Sergeant Joseph Rivera, and Lieutenant Benjamin Nelson for their
partnership in the investigation.
https://www.manhattanda.org/d-a-bragg-nypd-doi-announce-indictment-in-massive-construction-industry-kickback-scheme-2/