Lend Lease to pay US$ 56 million fine for over-billing

By Chris Sleight25 April 2012

Lend Lease (US) Construction, formerly Bovis Lend Lease, has agreed to pay US$ 56 million in fines and compensation for fraudulently overbilling clients in New York, US over a period of ten years. The settlement follows a similar deal made in january 2011, when Bovis agreed to pay US$ 5 million to the New York Department of Investigation (DOI).

James Abadie, head of the company's New York Office from 2002 to 2009 has pleaded guilty to his part in the fraud. He faces up to 20 years in jail and a maximum fine of US$ 250,000.

According to a statement from the US Attorney's office, Bovis systematically added of un-worked overtime to foremans' timesheets between 1999 and 2009. This practice is said to have applied to public and privately-funded projects alike. Mr Abadie is said to have played a key role in the fraud.

Bovis has also been charged with defrauding the Dormitory Authority of the State of New York (DASNY) and New Jersey Schools Development Authority (NJSDA) on their Minority Business Enterprise (MBE) requirements. The MBE programme is a scheme designed to increase participation of small contractors and those owned by women or other minorities, in public construction projects. On a contract with each authority, Bovis is said to have misrepresented the amount of work being carried out by MBEs.

Loretta E. Lynch, US attorney for the eastern district of New York said, "Through this deliberate scheme of billing clients for work not done, Bovis deceived their customers and stole taxpayer Dollars. They also abused a programme - designed to benefit and train minority contractors - for their own profit motive. Today's charges, guilty plea and settlement mark a significant step in our effort to eliminate fraud in the construction industry in New York City."

Federal Bureau of Investigation (FBI) assistant director in Charge Fedarcyk added, "Today's proceedings mark the culmination of a three-year investigation into a systemic pattern of audacious fraud by one of the world's largest construction firms. The overbilling fraud affected city, state, and federal public building projects. If you are a New York City resident, Bovis indirectly swindled you on three different levels. Whether projects are publicly or privately funded, padding contracts and skirting the law are crimes. And we are watching."

Lend Lease has made no comment on the case.

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