DA Bragg Brings The Hammer Down On A Stella Tower Contractor

NEW ROCHELLE, NY — Executives at a construction firm that worked on one of New Rochelle's biggest developments in decades are among those charged in a massive fraud and corruption case.

Manhattan District Attorney Alvin L. Bragg, Jr., announced a slew of indictments charging eight executives and six companies with pervasive fraud and corruption within the construction industry.

The execs and subcontractors are accused of conspiring to fraudulently use minority and women-owned business enterprises as pass-through entities to obtain contracts, as well as engage in payroll and insurance fraud.

The indictments detail schemes to defraud a state insurance fund of more than $1.7 million, and rigged construction project bids that included massive kickbacks and bribes. In some cases, money was stolen outright from subcontractors and workers, according to the D.A.

"The common factor in all of these alleged schemes is greed at all costs," Bragg said. "When the field is rigged, law-abiding companies and legitimate MWBEs [minority and women-owned business enterprises] 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."

The indictments were the result of a long-term investigation by the Manhattan D.A.'s Office's Rackets Bureau, which began when investigators identified a possible criminal enterprise after noticing suspicious check-cashing activity, according to Bragg's office. This led to separate investigations into recipients of bribes and the alleged Minority and Women-Owned Business Enterprises fraud schemes.

The Stella tower at 14 LeCount Place in New Rochelle was one of roughly a dozen projects in New York and New Jersey tied to the scheme, according to investigators.

"We take all relevant workforce and MWBE obligations extremely seriously and the allegations outlined in the D.A.'s complaint are completely unacceptable," a spokesperson for Stella developer WBLM 14 Le Count Owner LLC. told Patch in a statement. "JM3 was a subcontractor on the LeCount Place development and was terminated by the general contractor in Fall 2021 due to lack of performance, prior to completion of the project."

One indictment names Lawrence Wecker and four of his colleagues at JM3 Construction, a large non-union drywall and carpentry company that specializes in affordable housing projects. The indictment lists 60 criminal counts, from conspiracy to insurance fraud to money laundering.

Prosecutors contend the enterprise used a series of shell companies to cash legitimate-seeming checks that were used to fund a $150,000-a-week cash payroll. This was to avoid reporting the wages to the state's insurance fund, Bragg said. The D.A. noted that this left the workers woefully underinsured.

"Insurance fraud, including workers' compensation fraud, costs honest companies and employees tens of millions of dollars every year," Director of the New York State Insurance Fund, Gaurav Vasisht said. "We work hard to educate injured workers, companies, and the medical community on spotting and reporting fraud, and we’re grateful to D.A. Bragg and his office for indicting the bad actors in this scheme."

Bragg said, worse than being taken advantage of, the workers' very health was put at risk.

"The defendants tried to keep injured workers from going to the hospital so their clients and insurance providers would never discover the job site injuries," Bragg said. "And when workers did need emergency treatment, including in one instance more than 45 stitches for a workplace injury, the defendants instructed them to lie about where those injuries took place."

The corruption didn't end there, Bragg said, announcing the charges.

"Wecker and JM3 allegedly stole money meant for subcontractors by never making good on a promised payment: i.e., alleged theft," Bragg said. "One newly formed company’s young executives were forced to shutter their business when JM3’s payments never came through."

The indictments accuse JM3 of fraudulently claiming they used minority and women-owned business enterprises to secure contracts.

"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," New York City Department of Investigation Commissioner Jocelyn E. Strauber said.

When investigators served a search warrant at Wecker's home in November 2021, they also seized a loaded .38 caliber revolver. He now also faces weapons charges as a result.