Co-Owner of New York Construction Firm Sentenced for Role in a $5.2 Million DBE Fraud Scheme
On November 28, 2011, Balu Kamat, president of Environmental Energy Associates (EEA), was sentenced in U.S District Court in Manhattan, New York, to six months home confinement (w/electronic monitoring), two years probation, a $50,000 fine, and a $100 special court assessment. Mr. Kamat has also paid a $188,000 criminal forfeiture (payable jointly with co-defendant Carmine Desio).
On June 28, 2011, Mr. Kamat entered a guilty plea to mail fraud charges regarding the use of EEA, a Disadvantaged and Minority Business Enterprise (D/MBE), as a "front" DBE on projects receiving DOT grant funds. Beginning in approximately 1997, Mr. Kamat, along with co-defendant Carmine Desio, caused EEA to enter into public contracts to perform an array of subcontract work knowing that EEA lacked the labor, equipment, and financial capability to perform the work. As part of the scheme, they agreed to put employees of a specific general contractor (unnamed in the indictment) on EEA certified payrolls. This scheme occurred on the Metropolitan Transportation Authority (MTA) New York City Transit Authority's Fulton Street Transit Center - Dey Street Concourse, with a total DBE subcontract value of $ 5.2 million.
The investigation is being conducted jointly with the MTA - OIG, the U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigations, and the Port Authority of New York and New Jersey - OIG.