Two dozen accused of $7 million construction scam in New York

Two dozen people were charged Wednesday with taking kickbacks worth about $7 million from New York real estate developers.

The Manhattan District Attorney’s office said Robert Baselis was the boss of 24 people and 26 companies charged with conspiring to collect rewards for participating in a scheme that saw subcontractors overbid on lucrative construction projects to fill their wallets.

The FiDi Hotel in Lower Manhattan, the Remy on W. 28th St, The Fifth Avenue Hotel and the Walker Hotel in Tribeca were among the locations with construction projects prosecutors said were swindled by general contracting and construction management firm Baselice.

Prosecutors said Baselis lied to developers during his firm’s tender for subcontractors between April 2013 and July 2021, misleading them as to who was best suited for the job and manipulating the process by sharing inside information about competitors’ proposals. .

He then gave accomplices more than $100 million in subcontracts, mostly at inflated prices, prosecutors said. Baselice is accused of instructing the subcontractors involved in the ruse to raise their bids in order for him to get a kickback. According to court documents, he referred to his tactic of pretending power subcontractors are cutting their prices — to make developers think they’re getting a good deal — as his “dog and pony show.”

“Through this corrupt bidding process, defendants stole from developers by deliberately inflating subcontracts and knowingly charging higher prices,” said Manhattan District Attorney Alvin Bragg.

“But the harm here goes far beyond monetary amounts. When the bidding process is rigged, we all lose. The market suffers from a lack of quality competition, and developers are prevented from hiring the best companies on a fair basis,” Bragg added. “Honest law-abiding companies are being crowded out by those who break the law.”

Baselice allegedly received about $4.2 million in kickbacks. Another $2.8 million went to his associates Louis Astuto and Paul Noto, who controlled the businesses he owned. NYPD Inspector Matthew Hyland said some of the main figures had loose ties to organized crime.

Beislis and 23 others accused of fraud appeared at the Manhattan District Attorney’s office and were charged with grand larceny, commercial bribery, money laundering and other related charges, set out in an 83-count indictment.

Mike Vatter, organizer of Local 79 Construction and General Building Laborers, said he has long been campaigning against one of the accused companies, Alba Services Inc. The demolition and asbestos firm is accused of taking over $2.7 million in subcontracts with Baselice and dishonestly pocketing tens of thousands.

Vatter said the prosecution was “long in the making.”

“I hope this is the nail in the coffin,” he said.

Baselice attorney Louis Gelormino did not immediately return a call asking for comment.