The giant construction company that worked on the Sept. 11 Memorial and Citi Field projects has admitted to a massive fraud scheme and agreed to pay $50 million in fines and restitution in a deal to avoid criminal charges for overbilling on scores of public and private projects, according to federal court documents unsealed on Tuesday. The company, which changed its name from Bovis Lend Lease to Lend Lease after a fatal fire during its demolition of the Deutsche Bank building, will not be prosecuted criminally as a result of the agreement with federal prosecutors in Brooklyn, who say it is the largest construction fraud settlement ever in New York City. The man who led the company until the investigation was disclosed in 2009 and was one of the most prominent construction executives in the city, pleaded guilty to fraud charges on Tuesday in United States District Court in Brooklyn. At the heart of the overbilling scheme is a practice that investigators contend – and that many construction executives concede — is widespread, so much so that it has a name: eight plus two. It is the practice of paying labor foremen for two hours of overtime that they do not work each day as an incentive to stay on a construction project. In a sign of the reach of Bovis, the public works projects on which the company will admit overcharging city, state and federal agencies for labor include the renovation of the United States attorney’s office in Brooklyn, which oversaw the investigation and negotiated the deal, and the new federal courthouse where court papers outlining it were filed. James J. Abadie, 55, the former Bovis executive, pleaded guilty before United States Magistrate Judge Lois S. Bloom to a single count of conspiracy to commit mail and wire fraud based on the overbilling scheme. He faces a maximum sentence of 20 years in prison. The company, as part of its agreement to avoid prosecution, admitted to three counts of conspiracy to commit mail and wire fraud based on the overbilling scheme and its evasion of government contract requirements that it hire a certain percentage of minority- or women-owned contractors or those certified by government agencies as disadvantaged. A broad-shouldered man with silver hair, Mr. Abadie answered Judge Bloom’s questions quietly during the proceeding. Asked to describe his crimes, he told her: “From at least 1999 to 2009, I agreed with others at Bovis to continue the existing practice for Laborers at Local 79 to add one or two hours to their time sheets every day whether it was worked or not. I and others authorized the practice for labor foremen to take vacation and holidays while filling out their time sheets as though they had worked.” Mr. Abadie's lawyer, Stephen Kaufman, declined to comment after the proceeding. The agreement between the company and the offices of the United States attorney in Brooklyn, Loretta E. Lynch, known as a deferred prosecution agreement, and Mr. Abadie’s guilty plea were expected to be detailed later on Tuesday at a news conference. The investigation into the overbilling, which was conducted by the F.B.I., the inspector general of the Port Authority of New York and New Jersey, the inspector general of the United States Department of Labor, the city Department of Investigation and the Manhattan district attorney, began in 2009 with the complaints of a Bovis official, a former federal agent named Brian S. Aryai. Mr. Aryai, a senior vice president for finance, was fired by Bovis in 2009 after complaining about what he believed were financial improprieties and he wrote a letter to the chairman of its parent company in Australia, David Crawford. The March 27, 2009, letter detailed accusations of bribery of union officials and overbilling at a number of project sites. Lend Lease did not respond to a request for comment. The fraud investigation began several months after Bovis signed a nonprosecution agreement with the Manhattan district attorney at the time, Robert M. Morgenthau, in connection with the deaths of the two firefighters, Robert Beddia and Joseph Graffagnino. Under the agreement, the company acknowledged failures in connection with the fire, agreed to safety reforms and paid a multimillion dollar settlement to the city. The agreement states that the district attorney can reopen the case if Bovis violates its terms or commits any other crimes. The case follows earlier troubles for the company. Mr. Morgenthau’s office weighed criminal charges against the city for a myriad of failures in inspection and oversight in connection with the fire, which killed two firefighters, but ultimately chose not to go forward against it. Mr. Morgenthau brought manslaughter charges against three construction supervisors and a subcontractor who had worked at the Deutsche Bank building, saying their negligence in dismantling the structure played a critical role in the deaths of two firefighters. All three men were acquitted last summer.
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