Construction Execs and Subcontractors Conspired to Fraudulently Use Minority and Women-Owned Business Enterprises as Pass-Through Entities to Obtain Contracts for Affordable Housing Developments 

Engaged in Payroll and Insurance Fraud and Other Forms of Corruption

On May 2, Manhattan District Attorney Alvin Bragg announced a number of indictments charging JM3 Construction and others with pervasive corruption to defraud city and state agencies in the development of numerous affordable housing projects in the tri-state area, including in New Rochelle. 

M/WBE Fraud

JM3 Construction is a non-union contractor that worked on 14 LeCount Place (now known as “the Stella at10 LeCount Place”) in New Rochelle.  The indictment charges that JM3 engaged in minority-owned and women-owned business enterprise (M/WBE) fraud at that project.  

“Unfortunately, such fraudulent activity is all too common amongst non-union contractors,” Carpenters Union Business Manager Scott Smith told New RoAR News. “Local and State agencies need to do a better job at vetting contractors during the bid process on all projects with taxpayer funding.”

According to the indictment, “The JM3 Construction Enterprise engaged in significant fraud related to minority-owned and women-owned business enterprise (M/WBE) programs by making false representations and creating false documents and records to make it appear that it subcontracted with or purchased materials from M/WBE firms.”

Lying about Worker Injuries

D.A. Bragg’s indictment also includes charges related to money laundering, insurance fraud, and falsifying business records.

It alleges, in part, “In addition to the false statements and false information provided in connection with the companies’ workers’ compensation insurance, it was the business practice of JM3 Construction LLC and MGS Construction Corp. to cover up worker injuries, in particular, when the worker was undocumented and paid in cash since they were unable to explain the worker’s presence on the jobsite. The grand jury received evidence regarding JM3 Construction LLC workers injured on the project located at 14 LeCount Place, New Rochelle, New York, and the JM3 Construction Enterprise’s efforts to hide the injuries from JM3 Construction LLC’s client and have the injured workers lie about how an injury occurred when seeking medical attention. [During one such intercepted conversation, JM3 President Lawrence Wecker, directed the JM3 foreman responsible for the project in sum and substance, ‘Say he got cut at home and we’ll get the bill.’] Neither worker was compensated.“

The New Rochelle Industrial Development Agency (IDA) awarded the Stella’s developer, WBLM, with tax breaks, incentives, and mortgage benefits. The Carpenters Union’s Smith raised the question, “Does D.A. Bragg’s indictment warrant a clawback for the IDA investment in the WBLM 14 LeCount Place project?”

In a statement issued on May 7, County Legislator Damon Maher called for a legal review of “how this individual could be anywhere near a job that involves government money; i.e., the money you entrust to us as taxpayers,” as well as research on “the procedure for getting our taxpayer money back (‘clawback’) from the grant on this project,” and for labor representation on the New Rochelle Industrial Development Agency (IDA) and the City Planning Board.  

New Rochelle’s downtown redevelopment is not new to such illegal activity. In January 2021, Andrew Campos, the owner of CWC Contracting and a Gambino family captain, along with others, pleaded guilty to racketeering conspiracy.  CWC Contracting worked on RXR’s first project in New Rochelle at 360 Huguenot St./587 Main St.  RXR was chosen as New Rochelle’s Master Developer in 2014.