Four executives from Lehr Construction Corp. pleaded not guilty in court today after being indicted by the Manhattan District Attorney’s office for stealing an estimated $30 million from their clients.
Manhattan D.A. Cyrus Vance released a statement detailing that the company, specializing in interior construction, arranged for clients to be overcharged for work by general contractors, only to pocket the excess.
“This construction company was corrupt at all levels,” Vance said in the statement. “Its executives developed–and successfully executed–a scheme to steal millions of dollars from their clients. Simply put, they used an over-invoicing scheme to steal from their construction management clients, and then used general contractor jobs to recover the stolen funds.”
The District Attorney claims Lehr Construction Corp. was able to siphon money from their clients by having subcontractors overcharge clients, and receive a percentage of the profit, as a payoff for agreeing to charge less for bigger clients.
Clients listed in the indictment include Fidelity Investments, Zurich North America and The Economist.
The four executives charged are Jeffrey Lazar and Todd Phillips, both executive vice presidents, Steven Wasserman, who oversaw the bid packages proposed to clients, and Steven Halper, the finance director. Individual charges vary. The corporation and each executive are charged with multiple counts of grand larceny, and one count each of enterprise corruption, and scheme to defraud. Halper and the corporation are also charged with money laundering. All four executives pleaded not guilty and were released on $150,000 bail each.
The release says that the corruption took place between 1998 and 2010, though today’s announcement is not the company’s first brush with the law. In 1998, Gerald Lazar and his brother Howard- the father and uncle of Jeffrey Lazar, respectively- pleaded guilty to bribery when they ran the firm at that time. Prior to that, Howard pleaded guilty of bribing city construction inspectors in the 1970s.
Lehr Construction Corp. filed for Chapter 11 bankruptcy in February and their offices were raided the next month by the D.A.’s office for this investigation.