Several individuals and companies — including a man from Kearny — were named in an indictment charging pervasive fraud and corruption within the construction industry, including schemes that defrauded New York City and state agencies and affected the development of numerous affordable housing projects in New York City and the tri-state areas, Manhattan District Attorney Alvin L. Bragg Jr. announced.
“The common factor in all of these alleged schemes is greed at all costs,” Bragg, who also recently indicted former President Donald J. Trump, said. “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. These indictments send the message that the Manhattan D.A.’s Office does not tolerate fraud in any form.”
The indictments — including that of Marcus Pinheiro, 65, of Kearny, 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 observing suspicious check-cashing activity. In turn, this led to separate investigations into recipients of bribes and the alleged Minority and Women-Owned Business Enterprises (M/WBE) fraud schemes.
One indictment charges JM3 Construction, its principal Lawrence Wecker, 82, Michael Speier, 46, Joseph Guinta, 57, Lisa Rossi, 52, and Pinheiro, as well as their companies (collectively referred to as the JM3 Construction Enterprise), with enterprise corruption, alleging they collectively engaged in multiple criminal schemes to increase their business and revenues to the detriment of their workers and fair competition within the industry.
This indictment charges the defendants with 60 total counts, including conspiracy, insurance fraud, grand larceny, money laundering, falsifying business records, commercial bribing, scheme to defraud and offering a false instrument for filing.
According to court documents and statements made on the record, Wecker owned and operated JM3, a large, non-union drywall and carpentry company that specialized in government-subsidized affordable housing projects in New York County and the greater New York City area. Wecker, with assistance from Speier, directed business operations and was responsible for:
- Reporting truthful information about JM3’s use of Minority and Women-Owned Business Enterprises (M/WBE) subcontractors and suppliers to city and state agencies.
- Providing truthful payroll information for workers’ compensation insurance purposes.
- Giving accurate accounting information to clients.
- Properly paying subcontractors.
From 2015 through 2021, the JM3 is alleged to have engaged in a multitude of criminal schemes, including falsifying the business records related to the large, multi-million-dollar cash payrolls of JM3 and two subcontracting companies (JACG Construction and MGS Construction) led by two men on the JM3 payroll — Guinata and Pinheiro.
Pinheiro, our local connection, was reportedly responsible for generating cash by using a series of shell companies to cash checks which were made to appear as payment for legitimate subcontractor services. JM3, JACG and MGS allegedly used this cash to fund their payrolls.
During the course of the investigation, JM3’s cash payroll typically amounted to $150,000 a week, which also included the company making large, weekly cash payments to certain subcontractors, including Pinheiro and Guinta.
None of the cash was reported to the companies’ workers’ compensation insurance providers or tax authorities. The companies and their owners also took steps to hide and cover up workers’ injuries so that clients and insurance providers would not discover the cash payroll, Bragg said.
Both MGS. and JACG reportedly had workers’ compensation insurance policies with the New York State Insurance Fund (“NYSIF”). Bragg said they made false statements to NYSIF about their companies’ workforce size and payroll amounts.
The indictment alleges MGS. defrauded NYSIF of more than $1.7 million and continued to work following the cancelation of its insurance policy, thereby putting its workers at risk. JACG is alleged to have defrauded NYSIF of more than $360,000 in premiums.
JM3 reportedly engaged in a pervasive and multi-faceted M/WBE fraud scheme to obtain lucrative, government-subsidized affordable housing contracts. This involved falsifying business records and offering false instruments for filing with governmental entities (the New York City Department of Housing Preservation and Development and the New York State Department of Homes and Community Renewal) to make it appear that M/WBE firms were providing goods and services on projects. In fact, JM3 and/or other non-M/WBE firms provided the goods and services.
Among the projects in which the JM3 engaged in M/WBE fraud were:
- National Urban League, 126 West 126th Street, Manhattan
- The Fountains, 888 Fountain Avenue, Brooklyn
- Vital Brookdale, 535 East 98th Street, Brooklyn
- 79 Avenue D, Manhattan
- Via Vyse, 1812 Vyse Avenue, Bronx
- Story Avenue East, 1520 Story Avenue, Bronx
- 14 LeCount Place, New Rochelle
Several methods of M/WBE fraud schemes were carried out by the JM3 wherein pass-through entities — companies purported to be qualified M/WBEs but which performed no actual construction work — were used by the JM3 to gain business. One included the use of Rossi’s company, LNR, as a pass-through on projects.
In another, JM3 reportedly used Eco Geek Living, Inc., a certified M/WBE, as a pass-through to make it appear Eco Geek Living, Inc. supplied goods/materials and services to JM3 on certain projects. In order to obtain a $1.5 million drywall contract for a project in Harlem, JM3 used Urban Strategies of New York as a pass-through.
As alleged in a separate indictment, Lashawn Henry, 60, and Brittany Henry, 27, and their company Urban Strategies allegedly accepted cash payments from JM3 and other JM3 representatives in exchange for securing business for JM3.
The Henrys reportedly sought to use their influence with a consulting client, a large affordable housing builder, to steer other contracts to JM3 and Urban Strategies and conspired with Wecker and falsified records to claim Urban Strategies would provide M/WBE subcontractor carpentry work for JM3, work which it was wholly unqualified to perform.
This enabled JM3 to be awarded a contract for a development in Harlem.
In a separate indictment, Big Apple Designers is alleged to have engaged in an M/WBE fraud scheme and falsified business records and filed false documents with HPD and DHCR. The filings revealed the company had purchased materials from Eco Geek Living, Inc., a New York State certified M/WBE firm. In reality, a non-M/WBE firm, supplied the materials.
Affordable housing development projects were affected, including:
- Victory Plaza, 11 West 118th Street, Manhattan
- Nevins Street Apartments, 50 Nevins Street, Brooklyn
- Long Island College Hospital Redevelopment, 347 Henry Street, Brooklyn
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Kevin A. Canessa Jr. is the editor of and broadcaster at The Observer, an organization he has served since 2006. He is responsible for the editorial content of the newspaper and website, the production of the e-Newspaper, writing several stories per week (including the weekly editorial), conducting live broadcasts on social media channels such as YouTube, Facebook, and X, including a weekly recap of the news — and much more behind the scenes. Between 2006 and 2008, he introduced the newspaper to its first-ever blog — which included podcasts, audio and video. Originally from Jersey City, Kevin lived in Kearny until 2004, lived in Port St. Lucie. Florida, for four years until February 2016 and in March of that year, he moved back to Kearny to return to The Observer full time. Click Here to send Kevin an email.