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Investigations

Date

Company Official Sentenced for His Role in DBE Fraud

On January 10, 2013, Michael Paletta, president of Crossboro Construction Contracting, was sentenced in United States District Court in the Southern District of New York (SDNY) to 3 years of probation, a $50,000 criminal fine, 100 hours of community service, and a $100 special court assessment.

On September 11, 2012, Paletta pleaded guilty to a mail fraud conspiracy.  Between approximately 1994 and March 2011, Paletta, on behalf of Crossboro (a non-DBE), conspired with MS Construction (a DBE) to perform construction work on various federally-funded bridge projects in Manhattan and other boroughs where MS Construction was the purported DBE subcontractor.  MS Construction was paid approximately 5% as its "fee" and relied upon Crossboro for performance of the actual work.

As part of his plea agreement, Paletta also agreed to a forfeiture of $23,813.  On September 13, 2012, Crossboro agreed to a civil settlement with the SDNY to resolve a civil false claims action.  The amount of the settlement was $355,164. 

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