The Manhattan District Attorney's office and the New York City Department of Investigation charged 50 defendants in a kickback scheme to steal money from at least seven developers on construction projects, including 11 Stone Street(the FiDi Hotel), 12 East 48th Street (Hilton Club The Central at 5th New York), 101 West 28th Street (the Remy), and 189 Bowery (the citizenM New York Bowery Hotel).
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The scheme was allegedly orchestrated by Robert Baselice, an executive at the Firm, a construction management company who is accused of manipulating the competitive bidding process for trade subcontractors. According to court records, Baselice steered more than $100,000,000 in trade subcontracts and change orders -- often at inflated prices -- to co-conspirator subcontractors in exchange for kickback payments.
The subcontractors paid more than $4,200,000 to Baselice and more than $2,800,000 to entities controlled by his associates, including Louis Astuto and Paul Noto. Astuto and Noto, in turn, distributed hundreds of thousands of dollars in criminal proceeds to entities owned by Frank Camuso and his family members, the indictment said.
Twenty-four individuals and 26 companies are named in the 83-count indictment that charges them with conspiracy. There are also varying charges of grand larceny, commercial bribing and bid rigging.
"When the building process is rigged, we all lose," said Manhattan District Attorney Alvin Bragg. "The market suffers from a lack of quality competition, developers are prevented from hiring the best companies at fair prices and, importantly, honest, law abiding companies are pushed out by those that broke the law."
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As Baselice knew, the Firm's contracts with its real estate developer clients required the Firm to act in the clients' economic interests at all times, with full transparency, in an "open book" environment, and without any conflict of interest. The agreements specifically prohibited kickbacks, prosecutors said.
"In a systematic and ongoing manner, Baselice used his authority over the Firm's trade subcontractor bidding, buy-out and requisition processes to steal from the Firm's clients for his and his co-conspirators' benefit," court records said.
An attorney for Baselice, Michael Bachner, declined to comment.
The indictment quoted numerous messages in which Baselice appears to set a price for awarding subcontracts on various projects.
"On or about May 16, 2017, Kieran Keaveney and Robert Baselice had a WhatsApp text exchange during which Kieran Keaveney stated in sum and substance that his "number" for "foundation" on the 75 Kenmare Street project was '3.65,'" the indictment said.
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"On or about May 16, 2017, in that same WhatsApp text exchange, Kieran Keaveney stated in sum and substance to Robert Baselice "I have u covered in foundation."
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