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Shady Firms Flagged by City Helped Build Barclays Center

By James Fanelli | December 10, 2012 6:55am

PROSPECT HEIGHTS — At least seven construction companies that helped build the Barclays Center and other parts of the Atlantic Yards development have been red-flagged by the city.

Firms busted for bribery, fraud or other dirty deeds have been hired in the last five years to perform demolition, electrical wiring, utility work and concrete pouring at the heavily taxpayer-subsidized project in downtown Brooklyn, according to a DNAinfo.com New York analysis of public records.

All seven are currently on the city’s caution list, which warns agencies of contract bidders’ past problems. Two of the tainted firms acted so badly that the city has flat out banned them from contracting with its School Construction Authority.

None of the firms were placed on the list for their work at the Atlantic Yards. But four were on the caution list while working at the development.

Unlike the city, private developers are not required to consult the caution list before hiring a contractor.

But Atlantic Yards developer Forest City Ratner has received an estimated $761 million in subsidies and tax breaks from the city and the state to build the home of the Nets and mixed-use buildings, according to the city’s fiscal watchdog, the Independent Budget Office.

FCR awarded Hunt Construction Group the overall project contract. The firms identified by DNAinfo.com New York were subcontractors at the site.

One firm, Bronx-based Felix Associates LLC, received more than $15 million to perform utility work at the Atlantic Yards development. It worked at the site until July 2011 — two years after federal investigators charged its president, Anselmo Saiz, with bribery, records show.

Saiz conspired with Con Edison inspectors from 2004 to 2008 to artificially raise the cost of the firm’s construction contracts and then split the proceeds, records show. He was convicted of the kickback scheme in Brooklyn Federal Court in November 2011, sentenced to 21 months in a prison and fined $100,000.

Felix Associates has been banned from bidding on SCA contracts since May 2009 and won’t be eligible until 2016. It’s also on the caution list until 2022.

A message left on a phone connected to the firm was not returned.

Staten Island-based Mari Electric Contractors worked at sites along the development’s rail yards in May 2007, according to permits filed with the city Buildings Department. The company was placed on the caution list a year later.

Its principal, John Mari Jr., pleaded guilty to licensing fraud in Manhattan Supreme Criminal Court in March 2011 and was sentenced to 51 weekends in prison, records show. His firm has been banned from doing business with the SCA since 2008, with the disqualification continuing until 2016, records show. It’s on the city’s caution list until 2021.

Mari was busted by investigators for filing four electrical license renewal applications that falsely claimed he would be responsible for the work under the permit. Instead, an unidentified individual paid Mari $2,000 per month between 2006 and 2009 to use the licenses and the company’s name without his involvement or supervision, a criminal complaint says.

Mari previously pleaded guilty in a separate case in June 2008 for underpaying six employees while working for his father’s firm, Atlas Electric, on a contract job with the MTA. The plea agreement required him to pay back the employees for the shorted wages.

A former associate of Mari passed along a reporter's request for comment to him, but he did not respond.

A spokesman for Forest City Ratner said it had no record of doing business with Mari Electric, but added that a subcontractor may have hired Mari to perform the work.

Manhattan-based Site Safety LLC acted as the safety manager during the demolition of a Dean Street building at the Atlantic Yards site in August 2010, records show. The firm also oversaw the razing of a Pacific Street building in February 2011.

But the city placed it on the caution list from 2010 to 2020 for its ties to Testwell Laboratories.

V. Reddy Kancharla was a principal of Site Safety and Testwell. In February 2010 he was convicted of felony corruption charges in Manhattan Criminal Court for his role in falsifying concrete testing at Testwell.

Investigators found that Testwell, a leading concrete tester, forged bogus results on public projects, including Yankee Stadium, the Second Avenue subway and the Freedom Tower. Kancharla was sentenced in May 2010 to seven to 21 years in prison.

Site Safety president Peter Amato said in a statement that his firm and Testwell have always been separate entities.

"There was and is not now any affiliation or connection between Site Safety, LLC and Testwell Laboratories whatsoever," he said.  "The indictment and conviction related to business practices of Testwell Laboratories did not include Mr. Kancharla’s other affiliations."

He added that Kancharla had limited involvement with Site Safety until October 2008. 

"[Kancharla's] financial interest in Site Safety, LLC continued until mid-2011 when his temporary restraining order was lifted and I became the sole owner," Amato said. 

An FCR spokesman said it hired Site Safety to perform minor utilities and demolition work in 2009 — before it was placed on the caution list.

When provided Building Department records showing Site Safety still worked at Atlantic Yards in 2010, the spokesman said Hunt may have continued to contract with the firm.

FCR did not make a formal statement about the DNAinfo.com analysis, but it stressed that the caution list does not pertain to private companies. It also noted some of the firms still have contracts with the city.

The four other firms that worked at the Atlantic Yards and are on the caution list include:

• A. Russo Wrecking, which the city flagged after the firm received multiple violations between 2009 and 2011 from the Department of Environmental Protection, the NYPD and the Department of Transportation. The city’s caution list also warns that a Manhattan federal prosecutor had subpoenaed records of the Long Island firm, but noted it was not the target of an investigation.

A. Russo was placed on the caution list in 2009, but records show it worked at the Atlantic Yards in 2010. It still holds multiple contracts with the city.

• Manhattan-based Robert Parchment Plumbing & Heating, which federal investigators cited for violating laws barring employment discrimination based on race, color, religion, sex or national origin. Details of the violation were not readily available by press time. 

An FCR spokesman said Parchment was placed on the caution list after it completed minor work at the Atlantic Yards. Despite being on the caution list, it still has contracts with the city.

• Gateway Demolition, which was flagged for multiple Environmental Control Board violations between 2007 and 2010. An FCR spokesman noted that Gateway finished most of its work at the site before its inclusion on the caution list. Gateway also currently has multiple contracts with the city.

• Laquila Group, which received multiple Environment Control Board and OSHA violations between 2006 and 2009. It was placed on the caution list in 2009. It poured the foundation at the Barclays Center in 2010 under Hunt.