Construction Indictments DISTRICT ATTORNEY NEW YORK COUNTY Press release

DISTRICT ATTORNEY - NEW YORK COUNTY

NEWS RELEASE CONTACT: Barbara Thompson

September 6, 2000 (212) 335-9400

Manhattan District Attorney Robert M. Morgenthau and New York City Police Commissioner Bernard B. Kerik announced today the indictment of 38 individuals and 11 companies on racketeering charges stemming from a three year joint investigation into organized crime's involvement in the construction industry in the City.

The indictment charges that the members of the criminal enterprise, denominated "The Lucchese Construction Group," engaged in a number of labor bribery, bid rigging, and other anticompetitive schemes that systematically siphoned millions of dollars from both public and private construction projects. To generate the criminal proceeds of these schemes, corrupt contractors, who were required to use union labor and pay "prevailing wages," instead used non-union labor and did not pay prevailing wages. However, they billed the public agencies and private developers as if they had complied with the law. The difference between what was billed and the contractor's actual labor cost financed bribes to corrupt union officials to allow the use of non-union labor and payments to organized crime officials of a "mob tax" of at least five percent of the contract's value to facilitate the schemes.

In addition to the "mob tax" imposed on them, the contractors were also required to employ made members of the Lucchese crime family as "no show" or "no work" employees. A "no show" job meant literally that the person being paid was not present at the job site, while a "no work" job meant that the person would be present at the site, but doing no construction work. The purpose of these jobs was primarily to provide an ostensibly legitimate source of income for the made member, but also to provide medical coverage and pension benefits for these individuals.

Mr. Morgenthau said, "for generations, organized crime has had its tentacles deeply embedded in the economic and social fabric of the City. Despite law enforcement successes over the years, today's indictment demonstrates that the fight against organized crime is far from over. The mob's influence in the construction industry -- although not as pervasive as it once was -- still exacts a tremendous cost from the City. The "mob tax" outlined in today's indictment adds to the already high cost of construction, making the City a less attractive place to do business, and deters honest competitors from entering the field. Although fighting the insidious influence of organized crime is a continuous effort, today's indictment serves notice that we are up to the challenge,"

Commissioner Kerik said, "The arrest of these individuals closes one of the largest cases in the City's history and is another example of the Police Department's commitment to dismantle organized crime. The conclusion of this case will benefit the citizens of New York."

Mr. Morgenthau said that today's 57-count indictment involves eight construction projects during the years from 1997 through 1999. Three of the projects involve School Construction Authority ("SCA") jobs, including the addition of modular classrooms at P.S. 33 and LS- 93 in Queens, and new construction at I.S. 254 in the Bronx. The contracts for the work done at these three locations totaled approximately S32 million.

Two others are also publicly financed projects, including roadwork resurfacing at the Triborough Bridge for the Triborough Bridge and Tunnel Authority, and roadway resurfacing and cable repair at the Queensborough Bridge under the auspices of the New York City Department of Transportation. The contracts implicated in the investigation totaled more than $1 million.

Three of the projects involved are privately financed, including the renovation of the Park Central Hotel, located at 56^th Street and Seventh Avenue, the construction of the Doral Arrowwood Conference Center in Ryebrook, New York, and the addition of five floors of apartments to the existing building located at 354 Broadway in Manhattan. The contracts implicated in the investigation totaled more than $6 million.

The indictment describes the three component parts of the Lucchese Construction Group: the organized crime figures; the corrupt union officials; and the participating contractors.

Luccbese Crime Family Members and Associates

Eleven of those charged in today's indictment are members or associates of organized crime, including STEVEN L. CREA, the acting boss of the Lucchese crime family, and two Lucchese captains, or "capos," DOMINIC TRUSCELLO and JOSEPH TANGORRA.

Defendant CREA, as acting boss of the Lucchese family, directed the Lucchese Construction Group and received proceeds from its activities. In addition, he held an undisclosed ownership interest in a defendant company, KENT BUILDING SYSTEMS, INC., a modular construction company. CREA needed to keep his ownership interest secret in order to try to get KENT approved to conduct business with the SCA. In addition, CREA required other contractors to purchase modular units from KENT in order to do business in the New York area.

Lucchese capos TRUSCELLO and TANGORRA assisted CREA in the direction of the Lucchese Construction Group. TRUSCELLO operated the "Prince Street Crew" of the Lucchese crime family, while TANGORRA ran a Brooklyn based crew. Each capo was assisted by a number of Lucchese soldiers and associates who developed and exploited their relationships with union officials and contractors for the benefit of the criminal enterprise. In addition, the mobsters brokered the bribe payments and the "mob tax" payments and settled disputes that arose over who would dominate a particular construction site. In addition to receiving cash payments. TRUSCELLO was placed on

the payroll of a participating contractor so he could qualify for a pension he was not entitled to from the Mason Tenders' District Council.

Also named in the indictment are Lucchese soldiers JOSEPH DATELLO, PHILIP DeSIMONE, ANTHONY PEZZULLO, JOSEPH TRUNCALE, and ARTHUR ZAMBARDI, and Lucchese associates ANDREW REYNOLDS, GIUSEPPE PALMIERI and his brother ALESSANDRO PALMERI. They are each charged for their roles in bid rigging and the collection of bribe money and "mob tax" proceeds relating to various job sites.

Union Members of the Lucchese Construction Group

Eleven of the defendants are union officials who participated and benefited from the criminal enterprise's affairs. Among those indicted today are MICHAEL FORDE, the President of Local 608 of the United Brotherhood of Carpenters and Joiners who is also the President of the District Council of Carpenters for New York City and Vicinity. Also charged is Local 608 business agent MARTIN DEVERAUX. Both are charged with receiving bribes in return for allowing the use of non-union labor and other contract violations by contractor members of the criminal enterprise.

Another carpenter union official, GERALD WOODS, the Executive SecretaryTreasurer/Business Manager for the Northern New Jersey Regional Council of the Carpenters and Joiners of America has also been indicted. Woods received bribes from participating contractors for allowing contract violations and for improperly signing International Agreements, which permitted New Jersey contractors to work on job sites in the City without having to sign contracts with Local 608,

Also charged is the President of Local 1 of the Builders and Allied Craftsmen (the bricklayers union for the New York City area), SANTO LANZAFAME. He is charged with appointing job stewards at sites knowing they would file false union documents to cover-up violations by corrupt contractors in exchange for bribes. Other Local I officials charged for their corrupt activities are business agents JEREMIAH SULLIVAN, SR., JOHN CUCCHIARELLA, and ANT-14ONY BARBAGALLO, and shop stewards ANTHONY PEZZULLO, HENRI LaBARBERA and THOMAS ZMICH.

GIUSEPPE PALMERI, a shop steward from Laborers International Union Local 20 (Cement and Concrete Workers) is also charged for his role in rigging the bid at the LS. 254 project and for falsifying union reports on that job.

Contractor Members of the Lucchese Construction Group

The remaining 16 defendants, and I I associated companies, have been charged for their roles as contractors, employees or others involved in the criminal enterprise's activities.

Defendant SAUL HEIFETZ operated a number of union mason companies, including defendants DIBA CORP., and GRAND TRAIN CORP. Through his long association with Lucchese family members, he was able to use non-union labor in violation of contractual provisions. HEIFETZ paid defendant MIKOLAJ "NICK" PONIATOWSKI, who ran defendant MIETEK MASON CONTRACTORS INC., for use of PONIATOWSKI's large non-union work force on union and public projects. In addition, both HEIFETZ and PONIATOWSKI falsified certified payroll reports to the SCA to conceal their use of nonunion labor. HEIFETZ also paid the "mob tax" to CREA and other members of the Lucchese crime family.

Defendant JAMES BONAGURA was an employee of Canron Construction Corp. He assisted in rigging bids at I.S- 254, the Queensborough and Triborough Bridge projects and received bribes for assisting in bid rigging by other members of the criminal enterprise.

Defendant ADAM GALLINI was an estimator and project manager for defendant MARMER BROTHERS CONSTRUCTION LLC, GALLINI engaged in bid rigging with BONAGURA and defendant BRAIN THOMPSON, a principal of defendant NEW YORK BLACKTOP for contracts at I.S. 254. GALLINI also falsified Local 20 union reports to conceal the use of non-union labor. Defendant KEVIN BARBER was a MARMER Vice President who provided a "no work" job for Luccchese soldier JOSEPH TRUNCALE at the I.S. 254 project and also falsified union reports.

Defendant DOMINIC DETORE, a principal of defendant CLEVELAND CONSTRUCTION CO., engaged in bid rigging with BONAGURA and paid the "mob tax" on each of the projects he obtained by participating in the Luchese Construction Group.

Defendants ANTHONY FRANTELLIZZI and his brother DOMINICK FRANTELLIZZI were owners and officers of defendant COMMERCIAL BRICK INC., a union masonry contractor. Because of their participation in the Lucchese Construction Group, they were able to use non-union labor on their jobs in exchange for payment of the "mob tax" on those jobs.

Defendant LAWRENCE WECKER was a principal in defendant LISA CONSTRUCTION CORP. WECKER paid the "mob tax" in return for being allowed to work in New York using non-union labor. WECKER and defendant KENNETH GORDON, an insurance claims adjuster for the company that held a performance bond, rigged the bid for a subcontract at the Doral Arrowwood project and, along with others including CREA, thereby stole over $50,000 from AIG Insurance Company and its affiliate, the Insurance Company of Pennsylvania.

Defendant JOSEPH MARTINELLI, the owner of defendant NORTH BERRY CORP., was a contractor who paid the "snob tax" in return for the ability to violate contract provisions on his jobs.

Defendants ANTHONY O'DONNELL and ANTHONY RUCERETO worked with Scan Richard, an associate in TRUSCELLO's crew. Richard was a principal in S & S Contractors Inc., a subcontractor that violated agreements with the carpenters union by using non-union labor at the Park Central Hotel project. Richard was the son-in-law of John Riggi, the boss of the DeCavalcante Organized Crime Family in New Jersey that also operated in New York.

Defendant FINBAR O'NEILL was an officer of defendant TERRA FIRMA CONSTRUCTION MANAGEMENT AND GENERAL CONTRACTING LLC. O'NEILL used his associates in the Lucchese crime family to coerce a contractor to remove a lien from a project after money was stolen from the contractor. O'NEILL also paid the "mob tax" and falsified business records to conceal it.

Defendants STEVEN CHAIT OSSERMAN and NICHOLAS RUSSO, the ostensible owners of KENT BUILDING SYSTEMS, were in fact fronts for CREA. In order to conceal CREA's ownership and control of KENT, OSSERMAN and RUSSO falsified business records and filed false statements with the SCA.

All of the defendants are charged with Enterprise Corruption under New York's Organized Crime Control Act ("OCCA"), which is a class B felony punishable by up to 23 years in state prison. The defendants are also charged with various other crimes including: Bribing a Labor Official; Bribe Receiving By a Labor Official; Commercial Bribery in the First Degree; Commercial Bribe Receiving in the First Degree; Falsification of Business Records in the First Degree; Coercion in the First Degree; Grand Larceny in the Second Degree; and Combination in Restraint of Trade under General Business Law sections 340 and 341.

Assistant District Attorneys Michael Scotto and William Schaeffer presented the case to the grand jury and will handle the prosecution under the supervision of Assistant District Attorney Blake Coppotelli, Chief of the District Attorney's Labor Racketeering Unit. Anthony Carro, Chief of the Financial Crime Bureau and Investigative Analyst Jennifer Ferencko also assisted in the investigation.

Mr. Morgenthau extended his thanks to Carl Bornstein, Inspector General of the School Construction Authority as well as members of the NYPD, including Captain Kevin McCarthy, C.O. of the Organized Crime Investigation Division (OCID) and other OCID members including Captain Brian McCarthy, Sgt. Alfred Lent, Det. Robert Callus and Lt. John O'Brien. The District Attorney also thanked Katherine Flicker, Director of the New Jersey Division of Criminal Justice and John Coughlin, the agency's Chief

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Defendant Information is attached

STEVEN L. CREA---245 Scarsdale Road, Tuckahoe, New York. 7/18147

DOMINIC TRUSCELLO-21 Ashlyn Court, Wayne, New Jersey. 4/29/34

JOSEPH TANGORRA-1526 89th Street, Brooklyn, New York. 8/2/49

JOSEPH DATELLO--69 Timber Ridge Drive, Staten Island, New York. 5/16/51

PHILIP DESIMONE-1511 John Street, Fort Lee, New Jersey. 1/23/47

ANTHONY PEZZULLO-43 Bronx River Road, Yonkers, New York. 9/15/48,

JOSEPH TRUNCALE-90 Beekman Place, New York, New York. 1/15/31.

ARTHUR ZAMBARDI-Knollwood Drive, Middleton, New Jersey. 11/20/48.

SAUL HEIFETZ-3 Ullman Terrace, Monsey, New York. 8/21/35.

LAWRENCE WECKER-400 East 56th Street, New York, New York. 5/8/40.

KENNETH GORDON-1055 Federal Highway, Hollywood, Florida. 4/9/50.

JOSEPH MARTINELLI-30 Nicolosi Drive, Staten Island, New York. 4/12/36.

NICHOLAS RUSSO-68 Sargent Drive, Scarsdale, New York- 12/19/43.

STEVEN CHAIT OSSF-RMAN-240 Chestnut Hill Road, Stamford, Connecticut. 12/31/59.

JOSEPH PEZZULLO-6104 No. Chelsea Cove, Hopewell Junction, New York. 12/17/54.

ANDREW REYNOLDS-83 Wolkoff Lane, Staten Island, New York. 7123/49.

ALESSANDRO PALMERI-18 Rose Street, Brooklyn, New York. 11/22/69.

GIUSEPPE PALMERI-2167 W. 74`" Street, Brooklyn, New York. 1/6/68.

MIKOLAJ PONIATOWSKI-122 Reservoir Avenue, Wallington, New Jersey. 1/1/45.

JAMES BONAGURA--2047 E. 69`" Street, Brooklyn, New York. 2/29/40.

ADAM GALLINI-79 West Madison Avenue, Durmont, New York. 2/22163.

KEVIN BARBER-16 Quail Court, Kinneron, New Jersey. 4/9/66.

BRIAN THOMPSON-98 Jewett Avenue, Staten Island, New York. 9/23/71.

DOMINICK DETOU-220 Avenue U, Brooklyn, New York. 3/18/61.

ANTHONY FRANTELLIZZI-20 Center Drive, Douglaston, New York. 7/13/62.

DOMINICK FRANTELLIZZI---135 Park Lane, Douglaston, New York. 1/30/64.

ANTHONY RUCERETO-93 Indian Spring Road, Budd Lake, New Jersey. 12/31/53.

ANTHONY O'DONNELL-131 Swaim Avenue, Staten Island, New York. 3128/70.

GERALD WOODS-119 Grove Street, Lodi, New Jersey. 5/2/44.

MICHAEL FORDE-39-39 50`" Street, Woodside, New York. 8/14/54.

MARTIN DEVEREAUX--410 Highland Street, Cresskill, New Jersey. 04/1/51.

SANTO LANZAFAME-8 Irvine Johnson Street, Northport, New York. 10/22/31.

JEREMIAH SULLIVAN, SR.-107-05 109" Street, Richmond Hill, New York. 1/14/32.

JOHN CUCCHIARELLA-3227 Glennon Place, Brox, New York. 8/5/38.

ANTHONY BARBAGALLO-689 Asbury Street, New Millford, New Jersey. 2/1/29.

HENRI LABARBERA-346 Doane Avenue, Staten Island, New York. 11/3/42.

THOMAS ZMICH-40-44 196`" Street, Flushing, New York. 7/5/64.

FINBAR O'NEILL-370 Golf Drive, Hackensack, New Jersey. 8/1!65.

COMPANIES

GRAND TRAIN CORP. & DIBA CORP:--3 Ullman Terrace, Monsey, New York.

MIETEK MASON CONTRACTORS INC.-122 Reservoir Avenue, Wallington, New Jersey.

LISA CONSTRUCTION CORP -2366 Westchester Avenue, Bronx, New York.

COMMERCIAL BRICK INC -58-17 59'h Drive, Maspeth, New York.

MARMER BROTHERS CONSTRUCTION LLC.-1240 Liberty Avenue, Hillside, New Jersey.

NEW YORK BLACKTOP CORK-98 Jewett Avenue, Staten Island. New York.

CLEVELAND CONSTRUCTION CO.-1933 Richmond Terrace, Staten Island, New York.

NORTH BERRY CORP.-8 Berry Street, Brooklyn, New York,

TERRA FIRMA CONSTRUCTION MANAGEMENT & GENERAL CONTRACTING LLC,695 E. 132"d Street, Bronx, New York.

KENT BUILDING SYSTEMS INC.-560 No. Washington Avenue, Bridgeport, Connecticut.