The U.S. Attorney for the Southern District of New York on Monday indicted Reddy and Padma Allen, a couple who served as the CEO and CFO of a company called TechnoDyne, for allegedly engaging in fraud, kickback, and money laundering schemes related to a project to modernize the city's payroll system called CityTime. The first indictments in the case were handed down in February.
TechnoDyne--the principal subcontractor of the project's prime contractor Science Applications International Corp. (SAIC)--also was named in the indictment, along with several other consultants, including an SAIC employee. That employee--New York-based SAIC chief systems engineer named Carl Bell--pled guilty on June 14 to multiple charges and admitted receiving millions of dollars in kickbacks, according to the U.S. Attorney.
Indeed, there are nine separate charges in the case that range from wire fraud conspiracy to bribery to honest fraud conspiracy to obstruction of justice. As described by the U.S. Attorney, those named in the indictment implemented an elaborate scheme to convince the city to pay them millions for work not completed or employees that no longer worked for the company or worked fewer hours than claimed on timesheets. Not everyone named in the case has been charged on all nine counts, however.
New York has been working on the CityTime project for more than a decade; it was initially was meant to cost $63 million. So far it's cost the city $600 million, a bloated figure that's partially result of fraudulent behavior of those named in the indictments, according to the U.S. Attorney.
The Allens' role in the scheme was to receive and funnel fraudulent payments from the project to SAIC, according to the U.S. Attorney. This allegedly was done by consultants hired to work on the project--Mark Mazer and Gerard Denault--approving timesheets for project employees who were on leave or had been let go, as well as work orders and payment for unnecessary staff increases.
Denault and SAIC's Bell also allegedly tried to cover up kickbacks they received related to CityTime by making them appear to be legitimate income from separate consulting businesses, according to the U.S. Attorney.
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