DA Vance Announces Guilty Pleas of Four Individuals and Two Corporations in Construction Industry Pay-to-Play Scheme
DA Vance Also Announces Indictment of Fifth Defendant for Participating in the Scheme
Manhattan District Attorney Cyrus R. Vance, Jr., announced the guilty pleas of four individuals and two corporations for engaging in a pay-to-play scheme within New York City's construction industry. JOHN CASSISI, 57, the former Director of Global Construction for Citibank's Citi Realty Services, pleaded guilty in New York State Supreme Court to one count each of Money Laundering in the Third Degree and Commercial Bribe Receiving in the First Degree, and was sentenced today to two to six years in state prison for receiving at least half a million dollars in bribes, including cash payments and other lavish gifts, from contracting companies seeking business with the bank. Three other individuals – ARTHUR FAZIO, 58, DAVID ADELHARDT 47, and EDWARD WELSH, JR., 71 – as well as two corporations, ADELHARDT CONSTRUCTION CORP. and ADCO ELECTRICAL CORP., have also pleaded guilty for their roles facilitating these payments.
A fifth defendant, MARK FILE, 62, was indicted today in New York State Supreme Court on charges related to his role in the scheme, including Falsifying Business Records in the First Degree, Money Laundering in the Fourth Degree, Commercial Bribing in the Second Degree, and other charges.[1]
"Bribery and bid-rigging has, unfortunately, plagued the construction industry for generations," said District Attorney Vance. "By uncovering this scheme, which has already led to four individuals and two corporations accepting responsibility for their illegal behavior, the Office's Rackets Bureau is continuing the tradition of rooting out pay-to-play culture and protecting the integrity of this industry as a whole."
As admitted in the defendant's guilty plea and according to documents filed in court, as the Director of Global Construction for Citi Realty Services between January 2012 and December 2014, CASSISI was responsible for oversight of construction related to Citibank's real estate holdings, including the awarding of construction contracts. During this period, CASSISI admitted that, without the consent of Citibank, he accepted or agreed to accept cash and other gifts – including extravagant hunting trips and construction services performed at his own home – totaling approximately $500,000. The cash payments and gifts were provided by various individuals representing contracting companies, with the understanding that it would influence CASSISI's decisions related to awarding contracts. On October 6, 2015, CASSISI pleaded guilty in New York State Supreme Court. As part of the plea, in addition to the two to six year prison sentence, CASSISI is required to forfeit $500,000.
Three other individuals have also accepted responsibility for participating in or facilitating the pay-to-play scheme, including FAZIO, who at the time was Senior Vice President for Citi Realty Services at Citibank; DAVID ADELHARDT, the President of ADELHARDT CONSTRUCTION CORP.; and EDWARD WELSH, JR., the President of ADCO ELECTRICAL CORP (ADCO).
As admitted in the defendant's guilty plea and according to documents filed in court, between January 2012 and December 2014, FAZIO falsified business records, including the creation of fictitious purchase orders, and did so at the behest of his Citi Realty Services supervisor, CASSISI, in order to cover up the personal construction services being performed by a contractor at CASSISI's home without incurring the expense. FAZIO pleaded guilty in New York State Supreme Court on October 16, 2015 to one count of Falsifying Business Records in the First Degree, and will be sentenced later this month.
As admitted in the defendant's guilty plea and according to documents filed in court, between January 2012 and December 2014, ADELHARDT falsified business records at his company in order to cover up the company's payments of several lavish, weekend hunting trips in New York State for CASSISI, as well as construction work at CASSISI's home, which was performed by subcontractors arranged by ADELHARDT's company. ADELHARDT pleaded guilty today in New York State Supreme Court to one count of Falsifying Business Records in the First Degree and will be sentenced on January 15, 2016 to one-year intermittent imprisonment. The company, ADELHARDT CONSTRUCTION CORP., has also accepted responsibility for the illegal conduct, pleading guilty today in New York State Supreme County to one count of Falsifying Business Records in the First Degree. As part of the plea, the company will be sentenced on January 15, 2016 to a three-year conditional discharge and restitution to Citibank in the amount of $442,000. It will also be subject to audits overseen by the Manhattan District Attorney's Office over the course of two years.
As admitted in the defendant's guilty plea and according to documents filed in court, on December 19, 2014, WELSH, as President of ADCO – an electrical subcontractor with a longstanding business relationship with Citibank – approved, at the request of ADCO senior sales executive FILE, the purchase of a $21,500 Alaskan hunting trip for CASSISI, with the expectation that CASSISI would use his position to provide continued business for ADCO on Citibank construction projects. WELSH pleaded guilty in Manhattan Criminal Court on November 19, 2015, to one count of Commercial Bribing in the Second Degree, and was sentenced to a one-year conditional discharge and a fine of $1,000. As part of the plea, he must leave his position at ADCO within six months. ADCO has also accepted responsibility for the company's role in the bribery and bid-rigging, pleading guilty in New York State Supreme Court to one count of Falsifying Business Records in the First Degree. As part of the plea, the company will be sentenced at a later date to a three-year conditional discharge, forfeiture of $500,000, and a two-year period of audits overseen by the Manhattan District Attorney's Office.
Additionally, FILE, the senior sales executive at ADCO, separately was indicted today in New York State Supreme Court on various criminal charges related to his role in the payments made to CASSISI. According to court documents and statements made on the record in court, from approximately January 2012 to February 2015, FILE knowingly entered into agreements of payment with CASISSI in exchange for ADCO receiving subcontracting contracts on current or future Citibank projects. FILE also falsified business records in order to cover up these payments. As part of the scheme, FILE also assisted CASSISI in soliciting and securing pay-to-play agreements with other companies, and, in his role as an ADCO executive, entered into bid-rigging agreements with other contracting companies in order to stifle competition during the bidding process.
Assistant District Attorneys Christopher Beard, Senior Investigative Counsel, and Melissa Fox of the Rackets Bureau, handled the prosecution of the case under the supervision of Assistant District Attorney Jodie Kane, Chief of the Rackets Bureau, Assistant District Attorney Michael Ohm, Deputy Chief of the Rackets Bureau, and Executive Assistant District Attorney David Szuchman, Chief of the Investigation Division. Principal Financial Investigator Michael Kelly and Trial Preparation Assistant Michael Segnan assisted with the investigation.
District Attorney Vance thanked the New York State Police for its assistance in the investigation, including Superintendent Joseph D'Amico, Special Investigations Unit Major Thomas G. Marmion, Lieutenant David Atkins, and Investigators Michael Rhoads and Brahim Dedusevic, under the supervision of Senior Investigator Gustav Talleur.
[1] The charges contained in the indictment are merely an allegation, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.
Defendant Information:
JOHN CASSISI, D.O.B. 2/12/1958
Convicted:
• Money Laundering in the Third Degree, a class D felony, one count
• Commercial Bribe Receiving in the First Degree, a class E felony, one count
Sentenced:
• 2 to 6 years in state prison
ARTHUR FAZIO, D.O.B. 8/30/1957
• Falsifying Business Records in the First Degree, a class E felony, one count
DAVID ADELHARDT, D.O.B. 3/29/1968
EDWARD WELSH, JR. D.O.B. 1/20/1944
• Commercial Bribing in the Second Degree, a class A misdemeanor, one count
• One-year conditional discharge
• $1,000 fine
ADELHARDT CONSTRUCTION CORP.
ADCO ELECTRICAL CORP.
MARK FILE, D.O.B. 10/27/1953
Charged:
• Money Laundering in the Fourth Degree, a class E felony, two counts
• Contract in Restraint Of Trade/Monopoly, a class E felony, two counts
• Commercial Bribing in the Second Degree, a class A misdemeanor, two counts