Cover Story: Real Estate Indictments: 1999 Sweeping Charges Leveled Against Industry Members

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.

What Happened

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.

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5 Comments

  • I hope marvin is doing well.He must be 75 now.I also hope his son an old friend is well.I was shocked to hear what he did,I remember hanging with larry at his old office on ave j.Those were to good ol days.Greed is a bad thing,sometimes were never satisfied.
  • Yet somehow it's 2008 and Clearview Gardens continues to refer business to Michael Wegileski!
  • This is 2008 and the greed is definitely back; if it left at all. A modern building in Tribeca recently had a Local Law 11 project done at apparently 3 times the normal rate. In this case, the building manager, the major retail owner and the Board of Managers picked a contractor under suspicious conditions. This contractor then brought in his own engineer to oversee this project. More, this contractor works other jobs for the retail owner (also a Board member) and the building manager (who was brought in to the building by this Board member). The Manhattan DA office refused to even review this case. So much for justice.
  • the president of the board of directors of my co-op building has a documented history of accepting kick-backs from buyers or sellers of apartments in my building. Who can i report this illegal activity to?
  • Thanks for needed updated information.