Sentencing three men to prison for 20 years, a judge urged New York City officials to make substantial reforms Monday to prevent the kind of historic fraud over its project to modernize its payroll systems.
Most New York City taxpayers will be cheering the $68.7 billion budget because although it has some revenue shortfalls, the mayor won’t be dipping his hands into your pockets to find the funds.
With outside contractors doing $10 billion in business with New York City this year, there is plenty of room for impropriety.
SAIC Inc. attorney Douglas Lobel entered the agreement Wednesday before a federal judge in Manhattan to pay $500 million in restitution and penalties in a deal that helps it avoid prosecution for alleged over billing.
Federal prosecutors have said that nearly the entire sum the city spent on the project was tainted by an epic fraud that involved hundreds of contractors, systemic overbilling and an international money-laundering conspiracy.
“Nobody paid as much attention to it as they should have — from me on down,” Bloomberg said after a graduation ceremony at Gracie Mansion.
U.S. Attorney Preet Bharara called the fraud “epic in duration, magnitude and scope.” Prosecutors previously had put the figure at about $85 million.
The project manager who developed New York City’s troubled CityTime payroll system has been arrested on charges that he received at least $5 million in kickbacks for his work.
The project manager who developed the long-delayed and costly CityTime payroll system has been fired for ripping off the city by paying himself for hours that he did not work.
What is the opposite of outsourcing? Deputy Mayor Stephen Goldsmith calls it insourcing.
Bloomberg said Friday on his weekly radio show that the alleged fraud should have been detected earlier. But he said the city can’t investigate everything at all times.
Mayor Michael Bloomberg called the arrests “very disturbing news.” The CityTime system has been plagued with huge cost overruns.