Dive Brief:
- Former director of global construction for Citigroup's Citi Realty Services and former 1970s child actor John Cassisi has been sentenced to two to six years in New York state prison after pleading guilty to money laundering and receiving commercial bribes, The New York Times reported. Cassisi must also forfeit $500,000 he received in a part of the bribery scheme, although prosecutors estimate he might have received as much as $1 million.
- Prosecutors said companies gave Cassisi cash, a hunting trip, home renovation services and other gifts and favors over a three-year period in order to secure work with Citi Realty, particularly on its $1.6 billion corporate headquarters renovation in New York City.
- Citigroup official Arthur Fazio also pleaded guilty to creating fake invoices to help Cassisi hide the work being done at his home, and David Adelhardt of Adelhardt Construction Corporation, pleaded guilty to falsifying purchase orders to hide his firm’s work at Cassisi’s home, as well as payments for hunting trips.
Dive Insight:
Mark Costiglio, a spokesman for Citigroup Inc., of which Citi Realty is a division, said Cassisi — referred to as a "shakedown artist" by a representative of one of the companies who paid him bribes — joined the corporation in 2011 and was fired before company officials knew about the investigation.
"We are appalled by the actions of this former employee and would like to thank the district attorney’s office for their thorough investigation into this matter, which has appropriately resulted with his incarceration," Costiglio said.
Cassisi’s successful prosecution is a feather in the cap of District Attorney Cyrus Vance Jr. and New York City’s construction fraud task force, which officials formed in response to the increase in fraud accompanying the city’s building boom.
Since the increase in construction activity, New York contractors have been charged with a wide variety of fraud-related crimes. Hunter Roberts Construction Group, one of New York's largest construction firms, admitted to falsifying the number of hours worked employees worked on several projects and billing clients for the time.
A federal court in New York sentenced Patrick White, owner of R & L Construction, Inc., to prison for payroll tax fraud, and a Staten Island contractor was indicted for allegedly offering a New York school official bribes to speed up project payments.
According to the 2015 Kroll Global Fraud Report, 75% of construction, engineering and infrastructure companies have experienced a fraud incident in the past year, and the construction industry as a whole has the second-highest fraud rate across all industries Kroll surveyed.