D.A. Vance, MTA I.G. Pokorny Announce Charges in Metro-North Railroad Bid-Rigging Scheme


January 17, 2020

Confidential Insider Information Helped WRS Environmental Services Win Multi-Million Dollar Contracts for Waste and Asbestos Removal

Manhattan District Attorney Cyrus R. Vance, Jr., and Metropolitan Transportation Authority (“MTA”) Inspector General Carolyn Pokorny today announced the indictment of JAMES BERLANGERO, 62, a former contract manager at Metro-North Railroad, for corrupting the request-for-proposals process to award contracts to WRS ENVIRONMENTAL SERVICES, INC. (“WRS”), in exchange for more than $70,000 in kickbacks. WRS owner and CEO MICHAEL RODGERS, 62, and Director of Business Development THOMAS WILLIS, 60, are also charged for their roles in the fraud which unlawfully netted WRS Metro-North contracts for regulated waste transportation and disposal, as well as asbestos removal and other remediation services, valued at more than $10 million. The defendants are charged in a New York Supreme Court indictment with Corrupting the Government in the First Degree, Bribery and Bribe Receiving in the Second Degree, and Contracts and Agreements for Monopoly and in Restraint of Trade.[1]

“Asbestos abatement and regulated waste removal are serious public health and safety matters, particularly when it comes to facilities like Grand Central that hundreds of thousands of New Yorkers and visitors use every day,” said District Attorney Vance. “As alleged in the indictment, this Metro-North contract manager engaged in an extensive bid-rigging scheme which made it difficult for honest companies to compete for highly valued government contracts. Armed with confidential information like competitors’ price proposals and evaluations, WRS Environmental Services was able to win contracts valued at more than $10 million, all thanks to their inside man. Now, thanks to the talented investigators at the Office of the MTA Inspector General and our Rackets Bureau prosecutors, this corrupt scheme has reached the end of the line.”

“These individuals shamelessly lined their pockets at the expense of riders, taxpayers and Metro-North by criminally sharing confidential and competitive project information to undercut the competition,” said MTA Inspector General, Carolyn Pokorny. “Such an arrangement is considered bid-rigging and violates the fundamental tenets of good government contracting, leading to inflated costs to the government and by extension, taxpayers and riders. I’m proud of my Office and our law enforcement partners at the Manhattan District Attorney who worked hand-in-glove to put an end to this reprehensible scheme.”

The indictment is the result of a joint investigation by the Manhattan D.A.’s Rackets Bureau and the Office of the MTA Inspector General.

As charged in the indictment, in his position as contract manager for the Procurement and Material Management Department of Metro-North, BERLANGERO was tasked with ensuring the integrity of Metro-North’s contracts and free competition on contract solicitations, including Requests for Proposals. Instead, working out of his office at Metro-North’s midtown headquarters, he unlawfully helped his codefendants secure contracts in exchange for various kickbacks totaling more than $70,000.

As alleged, BERLANGERO acted in concert with RODGERS, WILLIS, and WRS to undermine free competition on multiple RFPs and contract awards by disclosing confidential Metro-North information to RODGERS which provided WRS with an unlawful advantage over its competitors:

  • In February 2015, BERLANGERO served as the contract manager of an RFP for the “Transportation and Disposal of Regulated Waste from Various Metro-North Locations,” which was intended to have only one winner. However, after it was apparent that WRS was not the preferred applicant, BERLANGERO oversaw the cancellation and reissuance of the RFP so that two companies would receive an award. In April 2015, BERLANGERO provided score sheets and evaluations completed by Metro-North selection committee members so WRS could tailor an oral presentation. Then, in June 2015, BERLANGERO gave RODGERS the favored proposer’s price proposal so WRS could undercut their price. Ultimately, WRS won a contract award of up to $4 million, receiving more than $2.7 million between November 2015 and October 2019.
  • In May 2015, BERLANGERO assisted WRS in obtaining a transport sub-contract on a Metro-North contract pertaining to Hurricane Sandy damage repair, even though WRS was not initially approved to receive transport contracts at that time. BERLANGERO steered the sub-contract work to WRS by providing an accepted competitor’s price to WRS, enabling the company to submit a lower bid, and facilitated WRS’s authorization to transport and dispose non-hazardous soil. To date, WRS has obtained more than $1 million pursuant to that sub-contract.
  • In October 2017, BERLANGERO served as the contract manager of an RFP for “Asbestos Removal and other Remediation Services” at locations including Grand Central Terminal and the Fleetwood Metro-North station. BERLANGERO provided WRS with confidential information submitted by the two existing remediation contractors so that WRS could tailor its application. Additionally, when WRS failed to submit a required pricing sheet, BERLANGERO allowed the company to submit the document after the deadline instead of rejecting its application as non-responsive. On multiple occasions, BERLANGERO provided WRS with confidential pricing information that enabled the company to submit the second-lowest price proposal for the contract, and later, the lowest-cost task order proposals within that contract. Between November 2018 and September 2019, WRS received more than $400,000 from Metro-North pursuant to the remediation contract.

In return for BERLANGERO’s assistance, RODGERS made a variety of check and cash payments to BERLANGERO, including six checks totaling more than $19,000. RODGERS also wrote checks totaling more than $32,000 to pay BERLANGERO’s residential mortgage, and deposited more than $8,000 in cash into BERLANGERO’s credit union account. RODGERS and WRS also gave $10,000 to BERLANGERO’s brother-in-law for an auto-racing sponsorship facilitated by BERLANGERO. Furthermore, RODGERS arranged for WRS employees to help perform a variety of services at BERLANGERO’s home, including cleaning and removing items from his basement, performing soil test sampling services prior to the sale of the home, and helping him move after the house was sold. Finally, BERLANGERO obtained a job for his daughter at WRS, and sought a job for his son.

Assistant D.A. Jaime Hickey-Mendoza is handling the prosecution of the case under the supervision of Assistant D.A.s Michael Ohm, Deputy Chief of the Rackets Bureau; Judy Salwen, Principal Deputy Chief of the Rackets Bureau, and Jodie Kane, Chief of the Rackets Bureau, as well as Executive Assistant D.A. Michael R. Sachs, Chief of the Investigation Division. Supervising Financial Investigator Hermeet Kaur of Forensic Accounting and Financial Investigations Unit (“FAFI”) assisted with the investigation under the supervision of Deputy Unit Chief Irene Serrapica, and Unit Chief Robert Demarest. Paralegals Clare Brandfonbrener and Madeleine Lippey also assisted with the case.

District Attorney Vance thanked the Office of the MTA Inspector General including Maureen A. McCormack, and Senior Investigative Attorney and Investigator Ivan Andrade.

 

Defendant Information

 

JAMES BERLANGERO, D.O.B. 11/6/1957

Glen Cove, NY

 

Charges:

  • Corrupting the Government in the First Degree, a class B felony, one count
  • Bribe Receiving in the Second Degree, a class C felony, one count
  • Contracts and Agreements for Monopoly and in Restraint of Trade, a class E felony, two counts

 

MICHAEL RODGERS, D.O.B. 4/27/1957

Wading River, NY

 

Charges:

  • Corrupting the Government in the First Degree, a class B felony, one count
  • Bribery in the Second Degree, a class C felony, one count
  • Contracts and Agreements for Monopoly and in Restraint of Trade, a class E felony, two counts

 

THOMAS WILLIS, D.O.B. 12/20/1959

 

Charges:

  • Corrupting the Government in the First Degree, a class B felony, one count
  • Contracts and Agreements for Monopoly and in Restraint of Trade, a class E felony, two counts

 

WRS ENVIRONMENTAL SERVICES, INC.

 

Charges:

  • Corrupting the Government in the First Degree, a class B felony, one count
  • Bribery in the Second Degree, a class C felony, one count
  • Contracts and Agreements for Monopoly and in Restraint of Trade, a class E felony, two counts