Chief Executive Officer of DCM Erectors, Inc. Charged with DBE Fraud
On July 31, 2014, Larry Davis, President and Chief Executive Officer of DCM Erectors, Inc. ("DCM"), was charged by criminal complaint in U.S. District Court, Manhattan, New York, with wire fraud and conspiracy to commit wire fraud. The charges were filed after Davis withdrew from a scheduled guilty plea.
The charges were in connection with Davis' alleged involvement with a fraudulent scheme to violate the Port Authority of NY & NJ's Minority and Women-Owned Business Enterprise Program ("M/WBE Program"), which is designed to increase the role of minority and women-owned businesses working on its projects. In 2007, DCM was awarded an approximate $256 million trade contract for work on One World Trade Center; and, in 2009, was awarded an approximate $330 million trade contract for work on the World Trade Center Port Authority Trans-Hudson (PATH) Transportation Hub (collectively, the "World Trade Center Project"). The World Trade Center Project received approximately $2.2 billion in grant funds from the Federal Transit Administration.
In order to satisfy the M/WBE Program, DCM and Davis allegedly engaged in a fraudulent scheme in which DCM claimed that certain work was performed by a MBE known as the Solera/DCM Joint Venture, LLC and a WBE known as GLS Enterprises, Inc. ("GLS"), but DCM performed the work or arranged for the work to be performed by other non-M/WBE subcontractors. Solera/DCM is a joint venture between DCM and an MBE, Solera Construction, Inc. ("Solera"), which is owned by Johnny Garcia, who previously pled guilty for his role in the fraudulent scheme. DCM and Davis established Solera/DCM as a joint venture with the express purpose of using it to satisfy MBE requirements on public construction projects. From 2009 through August 2012, Davis caused DCM to fraudulently claim approximately $70 million of MBE credit on the value of work purportedly performed by Solera/DCM on the World Trade Center Project when the work, including metal decking and steel procurement, was performed by a non-minority contractor or by DCM itself.
We are conducting this investigation with the Port Authority of NY&NJ – OIG, Internal Revenue Service – Criminal Investigations Division, and the Department of Labor – OIG.
Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.