After Manhattan District Attorney Robert M. Morgenthau handed down indictments against dozens of New York property managers in 1994 for taking kickbacks from contractors, New Yorkers, including the D.A.'s office, thought there would be at least a brief reprieve from local real estate corruption. Even so, the D.A.'s office continued to monitor the real estate industry. "This is Round One," predicted Dan Castleman, chief of the D.A.'s Investigative Division. This past June, Round Two was unveiled.
Indicted were 21 corporations and 62 individuals ranging from managing agents, building superintendents, vendors, and contractors to board members, architects, engineers and the head of New York University's maintenance department. The indictments were handed down in three phases. Those indicted earliest - Prism Management Ltd., Focus Real Estate Management, Inc., Taranto & Associates, and property managers Eric Dubbs, Scott Smith, Michael Wegielski and Mark Weinberger, and one super - allegedly defrauded a total of 31 New York City buildings through kickbacks from vendors and contractors. They are charged with felonies punishable by four to 15 years in prison.
On June 22, Marvin Gold Management Co., Elm Management Associates, Inc., Cantor Real Estate Corp. and individuals and businesses involved in illegal activities with them were charged. The biggest hit, involving bid-rigging and kickbacks in over 90 buildings, was to the waterproofing industry. Indicted were FPC Construction Corp., Kay Waterproofing Corp, L & M Larjo Co., Inc., Tindel Waterproofing & Restoration, Inc., C & D Restoration, Inc., H. Blum Contracting Corp., M & W Waterproofing, Inc., Stevemar Construction Estimators, Inc., among others.
The June 22 and 23 charges include bid-rigging, accepting kickbacks and Enterprise Corruption. Kickbacks ranged between five and ten percent of the contract price.