The contractor who provided the steel for the new World Trade Center falsely claimed to work with a minority-owned business, the Department of Justice announced Wednesday.
As a condition of $1 billion worth of contracts from the New York Port Authority to build the One World Trade Center, Larry Davis, CEO of DCM Erectors, was required to work with minority- and women-owned businesses. The companies Davis claimed to work with were fake.
“The construction work awarded to Davis came with the obligation to employ minority and women-owned businesses, an obligation that Davis shirked and then lied about,” Preet Bharara, U.S. Attorney for the Southern District of New York said. ” We cannot allow major public projects – particularly ones on the sacred World Trade Center site – to be built on a foundation of fraud,” (RELATED: Contractor Busted For ‘Playing The Minority Card’ To Rake In $1 Billion)
DCM received about $256 million to work on One World Trade Center in 2007, and around $330 million for construction work on the transportation hub. Davis’s company was tasked with designing and engineering the project, providing steel, and erecting the structures.
The owner of one of the fake companies testified against Davis earlier this month. Johnny Garcia, the Ecuadorian owner of the shell company Solera, said Davis paid him to do “basically nothing … I basically was playing the minority card.”
In fact, 40 percent of Solera is owned by DCM.
Davis also claimed to work with GLS Enterprises, Inc., which appears to be another fake company created to satisfy the woman and minority-owned business requirement. “Even though GLS was nominally independent from DCM and Davis, GLS’s only client and source of revenue was DCM,” the Justice Department said in July.
Gale D’Aloia, the named chairwoman and CEO of GLS, formerly worked for DCM as payroll manager, and continued the same duties under GLS, the court documents found.
Davis faces up to 40 years in prison for two separate counts of wire fraud at his sentencing hearing in November. D’Aloia and Garcia both pleaded guilty to their role in the fraud scheme, and face similar penalties.
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