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20 More Are Charged in Bid Rigging at Co-ops
By CHARLES V. BAGLI
In another step in the wide-ranging investigation of corruption
in the management of co-ops and condominiums, the Manhattan District
Attorney announced yesterday the indictment of 20 waterproofing
contractors, managing agents, architects and engineers who prosecutors
say colluded to rig the bidding for millions of dollars of work
at 94 buildings.
The property managers, architects and engineers generally got
kickbacks of 5 to 10 percent of the contract price in return for
helping the contractors obtain the work at the buildings, which
ranged from upper-income apartment houses in Manhattan
to low-income buildings in the Bronx, but also included a classroom
at New York University and the Hillcrest Jewish Center in Queens,
according to the indictment.
The contractors, in turn, increased the prices of their contracts
to cover the cost of the kickbacks, investigators said.
''Our investigation shows that it was routine for waterproofing
contractors to decide among themselves which of them would win
an ostensibly competitive bid,'' the Manhattan District Attorney,
Robert M. Morgenthau, said. ''These bid-rigging schemes were,
in turn, made possible by corrupt architects, engineers and managing
agents who chose the contractors invited to bid, fraudulently
encouraged building owners and co-op board members to award jobs
to favored contractors and received kickbacks from winning contractors
in return for their corrupt practices.''
Waterproofing involves replacing roofs and repairing masonry and
water-damaged structural steel. It can cost several million dollars
and is often the single most expensive item for a co-op or condominium.
The District Attorney also announced the indictment of 11 companies
yesterday, including Ricka Realty, L&M Larjo, C&D Restoration,
H. Blum Contracting and M&W Waterproofing, as well as John
Anastasi, an architect.
Over the last three weeks, the District Attorney's office has
won the indictments of 58 people and 24 contractors and management
companies at dozens of buildings in connection with a long investigation
into corrupt practices at cooperatives and condominiums
in the city.
The indictments yesterday illustrated not only how extensive the
corruption was, but also how easy it was for some waterproofers
to circumvent co-ops and condominiums that insisted on obtaining
multiple bids for work, prosecutors said.
The boards of the buildings often unwittingly relied on corrupt
architects, engineers or managing agents who secretly provided
contractors with information and prices that enabled them to win
any bidding contest, prosecutors said. Investigators and lawyers
at co-ops say that the District Attorney was able to get some
contractors and agents to cooperate with the investigation and
to tape-record their colleagues.
Yesterday's indictments charged a wide array of people and businesses.
Among them were Steven L. Katz and his company, Kay Waterproofing
of Manhattan, which were charged with bid rigging and bribery.
To get a $5 million contract at the Hudson View Gardens complex
in Washington Heights, Mr. Katz made $150,000 in payoffs to Robert
Lenahan of the Building Conservation Group, the architect who
was supervising the multimillion-dollar project, the indictment
said. And when board members at the co-op complained that the
contract should be rebid or renegotiated, Mr. Lenahan helped insure
that Mr. Katz stayed on the job, prosecutors said.
Mr. Katz ultimately dropped his price by nearly $1 million, and
many residents have been largely happy with the company's work.
But the allegations of bid rigging yesterday brought a sense of
gloom to Hudson View Gardens, a middle-income complex with 353
apartments in 15 Tudor-style buildings. The renovating work there
is still under way.
''My feeling is they couldn't have done better work here,'' said
Dorothy Paulsen, president of the co-op. ''But it's sad. It's
dismaying when you try to safeguard shareholders' money and things
still go awry.''
Mr. Katz, a vice president at his company, Barry Grummer, and
Mr. Lenahan, pleaded not guilty.
Edward Sisca and his waterproofing company, FPC Construction of
the Bronx, were indicted on charges of bribery and grand larceny
relating to the bid-rigging scheme. Mr. Sisca, who is 34 and lives
in Englewood Cliffs, N.J., pleaded not guilty. He did not return
calls yesterday.
In one instance, according to the indictment, Mr. Sisca paid a
managing agent, Vivian Sands, thousands of dollars in kickbacks
for help in getting $2.5 million in contracts at three buildings
in the Bronx. Ms. Sands was president of the co-op board at one
of those buildings, 3901 Independence Avenue, and managed the
other two, 4260 Katonah Avenue and 3400 Paul Avenue. Mr. Sisca's
largest contract was a $1.3 million concrete deck repair job at
3400 Paul Avenue, where, the indictment said, the bill was inflated
by at least $165,000.
Ms. Sands, 59, was charged with fraud and grand larceny. She could
not be reached for comment.
Roy Angelo, the former director of maintenance operations at New
York University, was indicted on charges that he took more than
$25,000 in kickbacks when he helped Mr. Sisca get two contracts
at the school worth more than $1 million.
Mr. Angelo resigned in February, a spokesman for the university
said.
Anthony Ballato and his company, Tindel Waterproofing and Restoration
of Jamaica, Queens, were also charged with bid rigging at six
buildings in Manhattan and the Bronx.
Anthony V. Lombardino, a lawyer for Tindel Waterproofing, said
his client ''absolutely denied the allegations.''
''We have a company that's fraught with integrity,'' Mr. Lombardino
said.