A New Jersey construction company with multimillion-dollar contracts for Big Apple public works projects has agreed to pay $20 million to avoid criminal charges after admitting to illegally skirting minority-hiring requirements in a settlement with the Justice Department.
Schiavone Construction Co. admitted that former executives under the firm’s previous owners used criminally fraudulent schemes to circumvent mandates that projects, such as the renovation of the Times Square subway station, include work for minority sub-contractors.
The Secaucus, N.J.- based firm, broke the law by pretending to use minority contractors on the construction of the Croton Water Filtration Plant in the Bronx and the Fulton Street transit hub in Manhattan, when they actually used non-minority firms.
The settlement is part of a non-prosecution agreement between Schiavone and the U.S. Attorney’s Office in Brooklyn, and focuses on the firm’s misdeeds between 2002-2007, prior to its acquisition by a Spanish engineering conglomerate.
Before its purchase, prosecutors on several occasions had alleged that under previous management Schiavone had ties to organized crime families with deep roots in the metropolitan area’s construction industry.
The firm’s former part-owner, ex-U.S. Labor Secretary Raymond Donovan — who was a cabinet officer during the Reagan Administration — beat mob-tied fraud charges in 1987.
Part of Schiavone’s resolution of its criminal conduct involves reimbursing the Metropolitan Transportation Authority $1,833,500 and the New York City Department of Investigation $539,760 for costs of the investigation.
“This investigation justly recovered the millions that should have gone to disadvantaged and minority-owned businesses and is bringing needed change to a large construction contractor,” said Rose Gill Hearn, the Department of Investigation’s commissioner. “Criminal activity, including fraud, has no place in City contracting.”
Another big player in the local construction trade, Skanska USA, is also under investigation by federal prosecutors in Manhattan for the same type of minority hiring fraud.
Last week the firm confirmed to the Post that it was under scrutiny for its hiring of New Jersey-based minority sub-contractor.
“We are aware of a government investigation involving Environmental Energy Associates, a minority sub-contractor used by Skanska USA Civil in New York, as well as numerous other contractors,” spokeswoman Nicole Didda said last week.
“Skanska has and continues to cooperate fully with the government in connection with this inquiry,” she said.
The probes, by federal prosecutors in Brooklyn and Manhattan, were spurred in part by an outside monitor hired by the Metropolitan Transportation Agency to oversee mega-projects including the planned the planned Fulton Street Transit Center in Lower Manhattan, the Second Avenue subway, and the extension of the number 7 line.
　
mmaddux@nypost.com