Structure Tone, a global construction services firm with annual revenues of over $3 billion, will pay a $55 million forfeiture after pleading guilty to felony charges. The lawsuit in the State Supreme Court, in Manhattan, alleged that the New York-based firm had its subcontractors, including electrical, drywall, and plumbing subs, inflate bills for the company's clients. The work in question included jobs for Bank of America, Moody's, Proskauer Rose, Bloomberg, and other customers from 2005 to 2009.
A report in the New York Times indicates that Structure Tone pled guilty to one count of falsifying business records in the first degree, a felony. David Szuchman, the chief of investigations for the district attorney, says Structure Tone became aware of the investigation in 2010 and put new safeguards in place; Szuchman's office continues to monitor the firm's business records and will do so for three years.
When functioning as a CM, Structure Tone asked subs to put unnecessary contingencies in an addendum called "Rider B," which was unknown to Structure Tone's clients. Execs also asked for discounts from subs on lump sum contracts, when the firm was working as a GC.
The company issued a statement as follows:
“The record-keeping issues, which form the basis of this agreement, date back to the period 2005 to 2009, and we have fully cooperated with authorities from the beginning. The financial position of our company — which generates $3 billion annually in revenue — continues to be strong. Long before this process began, we strengthened our compliance protocols to improve transparency.”
Related Stories
Coronavirus | Apr 14, 2020
COVID-19 alert: Missouri’s first Alternate Care Facility ready for coronavirus patients
Missouri’s first Alternate Care Facility ready for coronavirus patients
AEC Tech | Apr 13, 2020
A robotic dog becomes part of Swinerton’s construction technology arsenal
Boston Dynamics, the robot’s creator, has about 100 machines in the field currently.
Coronavirus | Apr 8, 2020
COVID-19 alert: Most U.S. roofing contractors hit by coronavirus, says NRCA
NRCA survey shows 52% of roofing contractor said COVID-19 pandemic was having a significant or very significant impact on their businesses.
Coronavirus | Apr 5, 2020
COVID-19: Most multifamily contractors experiencing delays in projects due to coronavirus pandemic
The NMHC Construction Survey is intended to gauge the magnitude of the disruption caused by the COVID-19 outbreak on multifamily construction.
Coronavirus | Apr 4, 2020
COVID-19: Construction completed on first phase of Chicago's McCormick Place into Alternate Care Facility
Walsh Construction, one of the largest contractors in the city of Chicago and in the United States, is leading the temporary conversion of a portion of the McCormick Place Convention Center into an Alternate Care Facility (ACF) for novel coronavirus patients. Construction on the first 500 beds was completed on April 3.
Coronavirus | Mar 21, 2020
Associated General Contractors launches eight-part webinar series around COVID-19
The programming, which begins Monday, will offer advice on how businesses might need to adjust during the virus.
Architects | Mar 9, 2020
New York's façade inspection program gets an overhaul following a death from falling terra cotta
January 14, 2020, kicked off big changes to the NYC Local Law 11 Façade Inspection and Safety Program (FISP) for Cycle 9.
Healthcare Facilities | Mar 9, 2020
Mobile wayfinding platform helps patients, visitors navigate convoluted health campuses
Gozio Health uses a robot to roam hospital campuses to capture data and create detailed maps of the building spaces and campus.
University Buildings | Mar 9, 2020
Auburn University, Robins & Morton open Construction Field Laboratory
Robins & Morton and Auburn University’s College of Architecture, Design and Construction (CADC) recently celebrated the dedication of the Robins & Morton Construction Field Laboratory.