By Olivia Scheck
MANHATTAN CRIMINAL COURT — Four executives from a major Manhattan construction company and the company itself were indicted Wednesday for stealing more than $30 million in bogus charges from their clients, District Attorney Cy Vance Jr said.
The executives, Jeffrey Lazar, Todd Phillips, Steven Halper and Steven Wasserman, of the Flatiron District’s Lehr Construction Corp., are accused of colluding with subcontractors to charge clients substantially more than the jobs actually cost.
The subcontractors would hold on to the extra money and then give Lehr a discount for that amount on other jobs, for which Lehr, rather than the client, was required to foot the bill, Manhattan District Attorney Cyrus Vance explained at a press conference announcing the indictments.
"The benefit to the subcontractors is that if they played ball with Lehr they would have more jobs in this very competitive industry," Vance said in a statement.
"Sadly, greed and corruption impose a hidden, billion-dollar-a-year tax on New York City's construction industry," he added.
Among the interiors construction company’s alleged victims were investment firms Gilder, Gagnon, Howe & Co. and Warburg Puncus, each of them swindled out of more than quarter million dollars, according to the DA.
The Economist magazine was also cheated out of an unknown amount during a $1 million construction job at their Midtown East offices in 2010, according to documents released by the DA.
Vance said the scheme dates back to 1998. Lehr has since filed for bankruptcy, he also noted.