Construction execs indicted on corruption and conspiracy counts

For years, executives with JM3 Construction, a New Jersey-based non-union firm, employed workers and subcontractors to put up drywall and do related carpentry work on government-subsidized affordable housing projects worth millions in Manhattan, Brooklyn, the Bronx and elsewhere in the tri-state area. 

But, prosecutors allege, they scored the work only after falsifying business and payroll records, stealing from subcontractors, rigging bids and bribing construction company officials.

JM3 executives also filed bogus records with government agencies, tried to steal from clients to pay debts, defrauded the state’s insurance fund and laundered money. 

The wide-ranging scheme, orchestrated by a known mob associate and lasting from 2015 to 2021, involved conspiring with minority and women-owned businesses (M/WBEs) to secure the contracts, according to a series of grand jury indictments released by the office of Manhattan District Attorney Alvin Bragg last week.

The ploy in part involved the creation of false documents and records filed with the city’s Department of Housing Preservation and Development and the state’s Department of Homes and Community Renewal that gave the impression that JM3 was subcontracting with and buying material from minority and women-owned firms, which are supported by a variety of state and city programs. 

JM3, though, used its own workers along with those of subcontractor firms to do the drywall and carpentry work. The workers, many of whom were undocumented, were paid in cash, while JM3 

concealed the subcontractors and the workers from clients, general contractors, developers and government entities.

“The common factor in all of these alleged schemes is greed at all costs,” Bragg said in a statement announcing the indictments. “When the field is rigged, law-abiding companies and legitimate MWBEs are cheated out of much-needed contracts. And when executives care more about their bottom line than their employees and the law, hard-working New Yorkers suffer.”

‘A walking ATM’

The indictment lays out dozens of charges, including enterprise corruption, conspiracy, scheme to defraud, grand larceny, falsifying business records, insurance fraud and money laundering. 

Among those implicated is Lawrence Wecker, JM3’s principal and president, who has long been associated with mob figures involved in the construction trades. Wecker, now 82, was once referred to as “a walking A.T.M. machine'' for his ability to launder money, according to The New York Times. 

Two other company employees, Joseph Guinta and Marcos Pinheiro, ran two subcontracting companies that conspired with JM3, with Pinheiro responsible for coming up with the cash to fund the firm’s sizable payroll, which prosecutors said he did by using numerous shell companies to cash checks that made them look like payments for actual subcontracting work. 

Those sham transactions eventually triggered suspicions from authorities and an eventual investigation by the district attorney's Rackets Bureau, which then branched out into investigations into bribery and fraud schemes. 

Officials said Pinheiro cashed more than $17 million on behalf of JM3 Construction, and more than $15 million on behalf of one subcontracting company, MGS Construction Corp, and more than $676,000 on behalf of another subcontractor, JACG Construction LLC.

Although both subcontracting companies had workers’ comp policies with the New York State Insurance Fund, they lied about their number of employees and the size of their payrolls, with prosecutors alleging they together defrauded the NYSIF of more than $2 million when they canceled their insurance policies.  

Among JM3’s projects were The Fountains, on Fountain Avenue, in Brooklyn; Vital Brookdale, on East 98th Street, also in Brooklyn; 79 Avenue D in Manhattan; National Urban League, on West 126th Street, also in Manhattan; Via Vyse, 1812 Vyse Avenue, in the Bronx; Story Avenue East, 1520 Story Avenue, also in the Bronx; and 14 LeCount Place in New Rochelle, New York.

“These defendants, as charged, enriched themselves at the expense of a program intended to assist minority and women-owned businesses, by deceiving City and State government entities, part of a series of frauds that shortchanged workers and undermined fair competition,” Department of Investigation Commissioner Jocelyn E. Strauber said in a statement. 

In a separate indictment, two principals of a certified M/WBE, Urban Strategies of New York, were charged with accepting cash payments from JM3 in exchange for steering work to the construction firm. 

LaShawn Henry, 60, Brittany Henry, 27, conspired with Wecker to falsify records to claim that Urban Strategies would provide M/WBE subcontractor carpentry work for JM3. “In fact, URBAN STRATEGIES did not have any capacity to perform actual construction work, and JM3 Construction would have performed all the work,” Bragg’s office said.