Owner of New York Transit Contractor Pleads Guilty to Money Laundering Conspiracy
On April 26, Andre Savvides of Dix Hills, New York, the majority owner of Excel Group, Inc., a Mineola, New York-based non-minority general contractor, pleaded guilty in U.S. District Court in Central Islip, New York, to a charge of conspiracy to launder money. Savvides conspired with a Disadvantaged Business Enterprise (DBE) subcontractor to create false documentation regarding the percentage of work Excel was subcontracting to that DBE firm. Contractors working on transportation projects receiving Federal funds are generally required to subcontract a portion of their work to DBE firms.
Excel Group received a $37.9 million contract in 1998 from the New York State Metropolitan Transportation Authority (MTA), a DOT grantee, to rehabilitate the Broadway/East New York Subway Complex. The company wrote two-party checks totaling $393,576 payable to TLH, a DBE-certified subcontractor, and to companies supplying materials for the project. A TLH official endorsed the checks, but TLH received none of that money. Savvides used the checks to falsely inflate payments to TLH in monthly reports submitted to MTA regarding the percentage of work Excel was subcontracting to the DBE firm.
Savvides and Excel Group were suspended by FTA after Savvides was indicted in May 2005. As part of the plea deal, Savvides has agreed to forfeit $393,576 to the government. The company was not charged. Savvides' sentencing has not yet been scheduled. This investigation was conducted by the OIG and other members of the Long Island Federal Construction Fraud Task Force.