- New York Attorney General Barbara D. Underwood announced Wednesday that the owners of a glass installation company in Queensbury, New York, pleaded guilty in a Warren County, New York, court to defrauding approximately 60 customers out of more than $1.3 million and then laundering that money through sham corporations. The charges against Robert Mirel and Debra Burnett of Arlington Equipment Corp. doing business as Arlington Manipulators include grand larceny, money laundering, scheme to defraud and tax evasion.
- Operation Bob the Builder, the code name for the investigation into Arlington Equipment, revealed that Mirel's and Burnett's company was one of the few providers of glass manipulation equipment, creating a near monopoly. However, the two stopped providing equipment by 2012, even though they received upfront payments, and continued to use their status in the glass industry to take orders and money from customers all over the world with no evidence that they intended to complete delivery. Arlington also took equipment in for repairs and, in some cases, sold it to other customers or for parts.
- Mirel and Burnett laundered customer proceeds through several shell and shelf corporations, left employees unpaid, misreported sales and payroll to state labor and tax authorities and prepared a fraudulent prospectus in an effort to sell Arlington for a great deal more than it was worth. Mirel faces five to 15 years in state prison, while Burnett is subject to a sentence of three to nine years. The two must also make restitution to the customers they defrauded, as well as to employees and state agencies.
Underwood's office seems to have made it a mission to root out construction fraud in New York state, and press releases and news of indictments might make shady contractors think twice before attempting to take advantage of customers or trying to evade their legal obligations to the state.
Last month, Underwood announced that her office had charged two New York state men, Michael Martin and D. Scott Henzel of the now-defunct Albany-based Eastern Building & Restoration, with allegedly stealing the identities of two minority-owned businesses, fraudulently obtaining millions in construction contracts and then not paying $400,000 of pension wages to dozens of employees.
The AG's office said Martin and Henzel took over two minority firms under the guise of mentorship and left employees and state tax authorities shortchanged. Martin was also charged separately for allegedly stealing money from one of the companies through a sham lease agreement and for making false insurance claims on behalf of the company in the amount of $200,000.