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NYC: Former Citibank Leader Took Bribes

Monday, December 7, 2015

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Four people and two corporations have pleaded guilty to engaging in a pay-to-play scheme in the New York City construction industry, the New York County District Attorney’s office announced.

In a statement released Tuesday (Dec. 1), Manhattan District Attorney Cyrus R. Vance Jr. said John Cassisi, 57, the former Director of Global Construction for Citibank’s Citi Realty Services, pleaded guilty in New York State Supreme Court to one count each of Money Laundering in the Third Degree and Commercial Bribe Receiving in the Third Degree. Both are felonies.

He was sentenced to two to six years in state prison.

Bribes of Cash and Gifts

According to the DA, Cassisi received $500,000 in bribes—including cash payments and other lavish gifts—from contracting companies who sought to do business with the bank.

Three othes—Arthur Fazio, 58; David Adelhardt, 47; and Edward Welsh Jr., 71—also pleaded guilty for their role in the crimes, the DA said. Two corporations—Adelhardt Construction Corp. and ADCO Electrical Corp.—also have pleaded guilty for their roles in facilitating those payments.

©iStock.com / Chris Schmidt

Four people and two corporations have pleaded guilty to engaging in a pay-to-play scheme in the New York City construction industry, the New York County District Attorney’s office has announced.

A fifth defendant, Mark File, 62, was indicted Tuesday on charges related to his role in the scheme.

His charges included one count of Falsifying Business Records in the First Degree (a felony), two counts of Money Laundering in the Fourth Degree (a felony), two counts of Commercial Bribing in the Second Degree (a misdemeanor) and two counts of Contract in Restraint Of Trade/Monopoly (a felony), the DA said.

“Bribery and bid-rigging has, unfortunately, plagued the construction industry for generations,” said District Attorney Vance. “By uncovering this scheme, which has already led to four individuals and two corporations accepting responsibility for their illegal behavior, the Office’s Rackets Bureau is continuing the tradition of rooting out pay-to-play culture and protecting the integrity of this industry as a whole.”

Bank Director’s Involvement

Cassisi was responsible for oversight of construction related to Citibank’s real estate holdings, including the awarding of construction contracts, the DA said. Between January 2012 and December 2014, Cassisi—through his guilty plea—acknowledged that he accepted or agreed to accept cash and other gifts from individuals representing contract companies so that Cassisi would be influenced to award them contracts.

In addition to the cash payments, Cassisi admitted that those individuals offered him extravagant hunting trips and construction work at his own home. He did so without the knowledge of his employer, the DA said.

On Oct. 6, Cassisi pleaded guilty. In addition to his prison sentence, Cassisi is required to forfeit the $500,000 he received in cash and services.

The Cover-up

Fazio, at the time, was senior vice president for Citi Realty Services at Citibank. David Adelhardt was the president of Adelhardt Construction. Edward Welsh Jr. was the president of ADCO.

©iStock.com / AndreyPopov

All have pleaded guilty to providing a former Citibank employee in charge of construction contracts with either receiving or agreeing to provide cash and gift bribes in exchange for favorable contracts.

Between January 2012 and December 2014, Fazio falsified business records, including the creation of fictitious purchase orders, and did so at the behest of his Citi Realty Services supervisor—Cassisi—in order to cover up the personal construction services being performed by a contractor at Cassisi’s home. Fazio pleaded guilty in New York State Supreme Court on Oct. 16 to one count of Falsifying Business Records in the First Degree (a felony), and is scheduled to be sentenced later this month.

Meanwhile, during the same period, Adelhardt falsified business records at his company in order to cover up the company’s payments of Cassisi’s weekend hunting trips in New York State and construction work at Cassisi’s home. That construction work was performed by subcontractors arranged by Adelhardt’s company, the DA said.

Adelhardt pleaded guilty Tuesday to one count of Falsifying Business Records in the First Degree (a felony) and is scheduled to be sentenced on Jan. 15, 2016. He is expected to receive a one-year intermittent prison sentence.

His company, Adelhardt Construction Corp., has also accepted responsibility for the illegal conduct and pleaded guilty Tuesday to one count of Falsifying Business Records in the First Degree (a felony). As part of the plea, the company is scheduled to be sentenced the same day as Adlehardt to a three-year conditional discharge and restitution to Citibank in the amount of $442,000, the DA said. It will also be subject to audits overseen by the Manhattan District Attorney’s Office for two years.

Welsh, as president of ADCO—an electrical subcontractor with a longstanding business relationship with Citibank—approved on Dec. 19, 2014, and at the request of ADCO senior sales executive File, the purchase of a $21,500 Alaskan hunting trip for Cassisi with the expectation that Cassisi would use his position to provide continued business for ADCO on Citibank construction projects, according to the prosecutors.

Welsh pleaded guilty in Manhattan Criminal Court on Nov. 19 to one count of Commercial Bribing in the Second Degree (a misdemeanor) and was sentenced to a one-year conditional discharge and a fine of $1,000.

As part of the plea, Welsh must leave his position at ADCO within six months. ADCO has also accepted responsibility for the company’s role in the bribery and bid-rigging and pleaded guilty in New York State Supreme Court to one count of Falsifying Business Records in the First Degree (a felony), the DA said.

Adelhardt Corporation

Additionally, one defendant was indicted on Tuesday (Dec. 1) for several charges related to his role in allegedly agreeing to pay the former Citibank director with bribes.

As part of ADCO’s plea, the company will be sentenced at a later date to a three-year conditional discharge, forfeiture of $500,000 and a two-year period of audits overseen by the Manhattan District Attorney’s Office.

Recent Indictment

File, the senior sales executive at ADCO, allegedly agreed to make payments to Cassisi. From approximately January 2012 to February 2015, File allegedly entered into agreements of payment with Casissi in exchange for ADCO receiving subcontracting contracts on current or future Citibank projects. File also allegedly falsified business records in order to cover up these payments.

As part of the scheme, File allegedly assisted Cassisi in soliciting and securing pay-to-play agreements with other companies. In his role as an ADCO executive, he also allegedly entered into bid-rigging agreements with other contracting companies in order to stifle competition during the bidding process.

Several assistant district attorneys and the New York State Police helped in investigating and prosecuting the offenders, the DA said.

Citibank Speaks Out

In a statement to the New York Times, a Citibank spokesman said Cassisi—a former child actor who joined the company in 2011—had been fired from the company this year because of his actions.

“We are appalled by the actions of this former employee and would like to thank the district attorney’s office for their thorough investigation into this matter, which has appropriately resulted with his incarceration,” said Mark Costiglio.

Cassisi, as a youngster, had a brief career as an actor, appearing in the sitcom “Barney Miller” and its spinoff “Fish,” as well as playing Fat Sam in the 1976 movie “Bugsy Malone,” the Times reported.

Cassisi declined to provide a comment to the daily paper.

Several assistant district attorneys and the New York State Police helped in investigating and prosecuting the offenders, the DA said. The investigation into the scheme is ongoing.

   

Tagged categories: Business matters; Construction; Criminal acts; Ethics

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