Two construction company executives allegedly stole millions of dollars in public works contracts by stealing the identity of two minority-owned businesses, the AG’s office charged.
According to an indictment that was recently unsealed by the New York State Attorney General’s office, Michael Martin, the president and owner of the now-defunct Eastern Building & Restoration Inc., and D. Scott Henzel, the controller for the company, took advantage of benefits offered to minority-owned businesses and lined their own pockets to buy Harley Davidsons, jetskis and tropical vacations.
As executives at Eastern Building & Restoration, the duo tricked the two minority-owned businesses, Lorice Enterprises inc. and Precision Environmental Solutions Inc., by offering them the opportunity to partner with Eastern, according to the AG’s office.
In reality, Martin and Henzel took over the companies instead and used them to help Eastern qualify for and secure public works contracts that require some of the award be paid to minority contractors, according to the indictment. The charges also included that both defendants didn’t pay their workers their $6 an hour pension funds that would add up to more than $400,00.
Separately, Martin is also charged with stealing from Precision through a fake lease agreement that totaled more than $150,00 and a fake insurance claim that paid out more than $200,000, the AG’s office said.
The prosecutors said that Martin spent more than $1 million of his ill-gotten gains on his lavish lifestyle. Martin allegedly used the corporate credit card to buy Harley Davidson motorcycles, snowmobiles, trailers, jet skis, off-road vehicles, an RV and more than $150,000 in other personal expenses. Martin also shared his stolen wealth with his girlfriend by taking vacations to the Dominican Republic and the Bahamas.
The indictments come after a lengthy joint investigation by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau, the New York State Office of the Inspector General, and the New York State Department of Labor.
“As we allege, the defendants crafted a shameful and elaborate scheme to line their pockets at the expense of minority-owned businesses, New York taxpayers, and their own employees,” Underwood said. “We will continue to aggressively root out fraud and protect New Yorkers from those who seek to game the system.”
Inspector General Catherine Leahy Scott added that the two abused the minority-owned business program that is meant to balance the scales for smaller companies trying to compete.
“The integrity of the programs encouraging the use of women and minority owned businesses in New York is critical to the government contracting process,” Leahy said. “I will use all the resources at my disposal and work closely with my law enforcement partners to pursue anyone who tries to defraud it.”
Both Martin and Henzel face up to 10 to 20 years in prison if convicted of all felony counts.