Federal authorities on Thursday charged a Canadian steel contractor with falsely obtaining hundreds of millions of dollars in World Trade Center construction contracts earmarked for minority- or women-owned businesses.
Larry Davis, president of DCM Erectors Inc., appeared in Manhattan federal court to face charges that he set up a front company, purporting to be a woman-owned business, when in fact he had DCM do the steel work itself or subcontracted it out to other non-women- or minority-owned companies.
Davis, 63, whose company has scored nearly $1 billion in WTC construction contracts in both the both the public and private sector, was charged with wire fraud and wire fraud conspiracy. He was released on $100,000 bail after appearing before Magistrate Judge Debra Freeman and faces up to 20 years behind bars.
He remained mum throughout his court appearance. His lawyer, Sam Talkin, said afterwards that Davis is “looking forward to having his day in court. He wants to fight these charges.”
However, prosecutors told Freeman the feds might look to bring additional charges against Davis for similar alleged crimes on other projects he’s overseen.
The scheme allegedly involved DCM’s work at 1 WTC and the WTC transit hub — contracts that called for the company to be paid $256 million and $330 million, respectively, according to the criminal complaint. Both contracts have reportedly ballooned to $810 million.
DCM was also hired for Larry Silverstein’s private 4 WTC project for $136 million.
The feds’ investigation followed findings by the Port Authority’s Inspector General last year of alleged fraud by Davis and DCM, a New York subsidiary of a Toronto construction giant.
“Larry Davis and his company had the special privilege of working on the World Trade Center Project, which … holds a special place in New Yorkers’ hearts,” Manhattan US Attorney Preet Bharara said. “These contracts came with the responsibility to increase the role of minority- and women-owned businesses in the project. Instead … Davis allegedly tried to cheat the system and deserving businesses out of work.”
Davis, of Mississauga, Ontario, allegedly directed Solera Construction, a minority-owned business in upstate Ossining, to falsify records to make it appear as if Solera was procuring steel for the projects between 2009 and 2012 when, in actuality, DCM did so. Solera’s owner, Johnny Garcia, was allegedly paid $2 million as part of the scheme.
Davis also used a female ex-employee, Gale D’Aloia, to allegedly help pull off the fraud by setting up another firm, GLS Enterprises of Manhattan. Davis then tapped GLS as a subcontractor for the projects, but GLS also performed no work.
D’Aloia was allegedly paid $575,000 for engaging in the scheme between 2009 and September 2012, the feds say.
Both D’Aloia, 66, of Charleston, S.C., and Garcia, 48, of Ossining, have previously pleaded guilty to wire fraud and wire fraud conspiracy.
Sentencing dates are pending, but D’Aloia has agreed to forfeit $575,000 to the government and Garcia $669,000.