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Investigations

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Construction Project Manager Sentenced for His Role in a Large DBE Fraud Scheme on New York Area FAA Funded Project

On January 16, 2013, Richard Schultz, project manager of Nationwide Construction, was sentenced in United States District Court for the Southern District of New York to six months of home confinement to be followed by three years of probation and 100 hours of community service.  He was also required to pay a $100 special assessment and consented to a monetary forfeiture of $61,750. 

Schultz admitted that between 2007 and March 2011, he conspired with Madeline Pepe, of Staten-Island based MS Construction Corporation, to commit disadvantaged business enterprise (DBE) fraud on a project funded through an FAA airport improvement project grant.  The investigation disclosed that Nationwide Construction (a non-DBE) fraudulently performed a $1.1 million fencing subcontract that was contracted to MS Construction (a DBE) on an FAA-funded project at LaGuardia Airport in Queens, New York.  They conspired to file documents with the Port Authority of NY&NJ generating the appearance that MS Construction had, in fact, performed the contract when they did not. 

This case is being worked jointly with the U.S. Department of Labor-OIG, the Port Authority of NY & NJ-OIG, and the New York City Department of Investigation.