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DISTRICT ATTORNEY - NEW YORK COUNTY |
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News Release |
Contact: Barbara Thompson |
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The 16-count first indictment charges eight people and five companies with Enterprise Corruption under New York's Organized Crime Control Act ("OCCA"). The indictment charges that members of the corrupt enterprise, denominated the "Delancey Group," had a common criminal purpose of profiting from crimes relating to union projects, including SCA projects. As part of the racketeering enterprise, members of the Delancey Group routinely bribed officials of Local 8 of the United Union of Roofers, Waterproofers and Allied Workers* in exchange for labor peace, allowing non-union roofers to work on union projects, and non-enforcement of the collective bargaining agreements. The bribe payments were facilitated by a money laundering and cash generation scheme conducted on behalf of and by members of the enterprise. Mr. Morgenthau said, "This investigation, which is an offshoot of our earlier investigations into the waterproofing industry, demonstrates the insidious nature of labor bribery schemes by which corrupt union officials line their own pockets at the expense of their hard-working members and the agencies who pay for these projects. Rather than enforce the wage and benefits payments as mandated by union contracts, the corrupt union officials accept tens of thousands of dollars in bribes to allow corrupt contractors to use non-union labor. The contractors, in turn, submit false payrolls to public agencies, certifying falsely that they have used union labor and have made all required payments; the contractors are thereby able to receive payments greatly above their true costs. These inflated payments defraud the public agencies, finance the labor bribes and allow the contractors to put more money into their own pocket." Mr. Bornstein said, "This prosecution illustrates that the violation
of prevailing wage laws is not limited to the exploitation of workers.
It generates large amounts of cash which it is alleged in this case was
used to enrich corrupt labor officials and the contractors who engaged
in this conduct. The SCA remains committed to preventing this kind of
fraud nad corruption. A joint investigaiton with the Manhattan District
Attorney's Office such as this is pivotal to the agency's efforts. It
underscores the importance of the collaboration between mr. Morgenthau's
Office and the SCA Inspector General's Office since the SCA was founded
over 10 years ago." Delancey Group Labor Bribery Schemes JOSEPH DELANCEY, a non-union roofing contractor who operated a number of different corporations, including defendants WEATHER-TITE and 21st CENTURY CORP. OF NEW YORK, is charged with being the hub of the racketeering group. DELANCEY worked on roofing projects throughout New York City, using a large non-union labor force which he paid below required union scale and prevailing wage rates required on projects by public agencies. DELANCEY falsified certified payrolls to conceal his use of non-union labor and his violation of the union and prevailing wage requirements. To evade union wage and benefit requirements, DELANCEY bribed two business agents of Local 8, defendants GEORGE D'ANDREA, who had jurisdiction over jobs in Manhattan, the Bronx and counties north of the Bronx, and JOSEPH FAMULARO, SR., who had jurisdiction over jobs in Brooklyn and Queens. In addition, DELANCEY acted as a middleman in brokering bribe payments by other contractors to D'ANDREA and FAMULARO, SR. and falsified checks and invoices to conceal these payments. More than $200,000 in bribes was paid to the D'ANDREA and FAMULARO, SR. by the DELANCEY GROUP in 1999 alone. In addition, the investigation revealed that bribes calculated to be approximately 10% of the total contract price of other roofing jobs was paid to FAMULARO, SR. The bribes were paid on jobs which ranged in size from $50,000 to $500,000 each. Also charged as part of the criminal enterprise is FAMULARO, SR.'s son,
JOSEPH FAMULARO, JR. FAMULARO, JR. and his wife were principals of defendant
J.A.L. ROOFING CORP., a Local 8 and SCA pre-approved roofing contractor
located in Brooklyn. FAMULARO, JR. paid D'ANDREA bribes for the ability
to use non-union labor, including DELANCEY's labor force, on roofing projects
in the Bronx. At his father's direction, and in exchange for kickbacks
from DELANCEY, FAMULARO, JR. falsified SCA subcontractor approval submissions
to enable DELANCEY to use his non-union labor on SCA projects under the
name J.A.L. ROOFING CORP. Thus, DELANCEY made illegal payoffs in two directions:
first to FAMULARO, SR., to evade union rules, and second, to FAMULARO,
JR. for use of his company's pre-approved status. Defendant THOMAS DELANCEY, the son of JOSEPH DELANCEY, was a principal of defendant FIRST CLASS CONTRACTING CORP., a New Jersey-based corporation. THOMAS DELANCEY was able to obtain construction work through his father's relationship with the Local 8 business agents. In addition, THOMAS DELANCEY paid bribes to FAMULARO, SR. in exchange for being allowed to work on these jobs. Defendant CONSTANTINO "COSTAS" CHRISTODOULOU was JOSEPH DELANCEY's bookkeeper and prepared the falsified documentation required by the Delancey Group's criminal schemes, including accounting records, payroll documents, and certified payroll reports. Through this criminal enterprise and its control of the roofers union, DELANCEY and the other members of the enterprise were able to gain dominance in the New York City roofing industry. Working as a non-disclosed subcontractor for approved general contractors, DELANCEY and his group worked on a large number of public projects for the SCA and other public agencies, including the New York Dormitory Authority, the New York City Department of Design and Construction, the Port Authority of New York and New Jersey, and the New York City Transit Authority. The investigation revealed that DELANCEY obtained more than $4 million in SCA contracts alone. The indictment charges that the criminal enterprise was involved in projects including: · MANHATTAN: · BRONX: · BROOKLYN: John Dewey High School · QUEENS: · STATEN ISLAND:
As part of the criminal enterprise, JOSEPH DELANCEY and defendant JOHN SARAPPO generated cash and money orders which were used for the bribe payments and the cash payrolls that were an integral part of the Delancey Group's schemes, as well as for other general tax evasion purposes. The investigation revealed that using SARAPPO's business, defendant CENTRAL CLEANERS, a purported dry cleaning business located in Passaic, New Jersey, DELANCEY and SARAPPO generated more than $1 million for these purposes from 1998 through 1999. The money laundering and cash generation at CENTRAL CLEANERS was facilitated by the fact that the company was an approved distributor of money orders. The money laundering and cash generation was done through a variety of schemes. First, structuring was employed. Large checks were written by contractors involved in the labor bribery schemes to DELANCEY. He would then deposit the checks into his business account and generate a large number of smaller checks to CENTRAL CLEANERS, which would deposit them and, in turn, make cash withdrawals and purchase money orders. Later in the scheme, DELANCEY and SARAPPO did not even bother to try to hide their transactions by use of structuring. Instead, DELANCEY would merely give SARAPPO checks from affiliated contractors made out to one of DELANCEY's companies. SARAPPO would deposit these third-party checks into CENTRAL CLEANERS' account and cash and money orders would be obtained. Bribe payments were often picked up directly from CENTRAL CLEANERS. For example, FAMULARO, SR. regularly would go to CENTRAL CLEANERS directly and pick up his bribes financed by the scheme from SARAPPO. D'ANDREA, on the other hand, received his bribes from DELANCEY only after the cash had been generated by SARAPPO. The defendants are all charged with Enterprise Corruption, a class B felony, punishable by up to 25 years in state prison. The defendants are also charged with various counts including Bribe Receiving by a Labor Official, Bribing a Labor Official, both class D felonies, punishable by up to seven years in prison, and Scheme to Defraud in the First Degree, Falsifying Business Records in the First Degree, and Tampering with Physical Evidence, all class E felonies, punishable by up to four years.
In this scheme, CAGGIANO and PRINCETON RESTORATION used a phony supply company created to accept falsified PRINCETON checks which were then turned into cash. The phony supply company, defendant F.U.U.S. SUPPLY CORP., was incorporated by GEORGE SCHERER, a some-time PRINCETON employee. PRINCETON bookkeepers DANIELLE DODY and FRAN CAGGIANO, the mother of ANTHONY CAGGIANO, prepared PRINCETON checks made payable to F.U.U.S, and SCHERER negotiated or cashed the checks, giving the cash back to PRINCETON principals and employees, less a commission of 10 percent. PRINCIPAL principals used this money to finance cash payrolls. Thus, the F.U.U.S scheme enabled PRINCETON and its principals to generate large sums of cash for their own use, while falsely characterizing the transactions as legitimate and tax-deductible expenses. The investigation revealed that from May through October 1998, PRINCETON negotiated at least 47 checks made payable to F.U.U.S., totaling more than $332,000. Each of these checks is charged in a separate count of the indictment; the 48th count of Falsifying Business Records is based on the false invoices created to conceal the detection of the F.U.U.S scheme during an audit conducted at PRINCETON by the SCA Inspector General's Office in December 1998. Significantly, after this audit, PRINCETON stopped using F.U.U.S. and turned to DELANCEY and SARAPPO as a means of continuing their fraudulent cash generation, as charged in the OCCA indictment.
For their roles in the investigation, Mr. Morgenthau thanked SCA Inspector General and Vice President Bornstein and his staff and the New York City Police Department and Commissioner Howard Safir, Chief of Detectives William Allee, and D.A.'s Squad Commander, Captain James Holohan and the detectives assigned to the Squad. * Local 8 has jurisdiction throughout the five boroughs of New York City, as well as the counties of Westchester, Rockland, Dutchess, Orange, Putnam, Sullivan and Ulster in New York and part of Hudson County in New Jersey. Local 8's jurisdiction and contract provisions were enforced by its three business agents, two of whom are charged today. Local 8's headquarters are located at 467 Dean Street, in Brooklyn. |
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