April 24, 2012 / 6:02 PM / 8 years ago

Bovis Lend Lease fined $56 million for fraud

NEW YORK, April 24 (Reuters) - A U.S. subsidiary of the Australian giant Lend Lease Construction has admitted to a 10-year overbilling scheme on New York area projects and will pay $56 million in fines and victim restitution, prosecutors said on Tuesday.

Bovis Lend Lease, as the subsidiary was previously known, has its largest U.S. office in New York City, where it employs about 1,000 people and has worked on projects such as the September 11 Memorial in Lower Manhattan and the Citi Field baseball arena in Queens.

Federal prosecutors in Brooklyn said the company had pleaded guilty to criminal charges it had a “systematic practice” between 1999 and 2009 of billing clients — often government agencies — for hours its workers had never worked.

“Today’s proceedings mark the culmination of a three-year investigation into a systematic pattern of audacious fraud by one of the world’s largest construction firms,” FBI Assistant Director in Charge Janice Fedarcyk said in a statement.

Prosecutors said that the former head of Bovis’ New York office, James Abadie, 55, had pleaded guilty earlier on Tuesday to charges of conspiracy to commit mail and wire fraud.

Abadie faces up to 20 years in prison. An attorney for Abadie, Stephen Kaufman, did not immediately return a call seeking comment.

Bovis agreed to pay $56 million in penalties and victim restitution as part of a deferred prosecution agreement made public on Tuesday.

The agreement showed Bovis had accepted responsibility for the fraud, and was cooperating with investigators. As part of the agreement, the company agreed to put in place new internal controls to prevent any future misconduct.

The cases are U.S. v. James Abadie and U.S. v. Lend Lease (US) Construction LMB, U.S. District Court for the Eastern District of New York, No. 12-274 and 12-288.

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