New York Construction Company Owners Plead Guilty in Connection with DBE Fraud Scheme
On June 28, 2011, Balu Kamat and Carmine Desio, president and vice president, respectively, of Environmental Energy Associates (EEA), pled guilty in the U.S District Court, New York City, New York, to mail fraud charges. EEA is a Disadvantaged and Minority Business Enterprise (D/MBE) that was used as a "front" DBE on projects receiving DOT grant funds.
Kamat and Desio admitted that since 1997, they participated in a scheme wherein they entered EEA into public contracts to perform an array of subcontract work knowing that their company lacked the labor, equipment, and financial wherewithal 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's certified payrolls. This scheme occurred on the Metropolitan Transportation Authority (MTA) New York City Transit Authority (NYCTA) Fulton Street Transit Center - Dey Street Concourse, with a total DBE subcontract value of $ 5.2 million. Sentencing has been scheduled for September 27, 2011.
This is a joint investigation with the Metropolitan Transportation Authority - OIG, the U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigations (OLRFI), and the Port Authority of New York and New Jersey - OIG.