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
Architects | Oct 29, 2019
Top takeaways from the Lean Construction Institute Congress 2019
More than 1,600 Lean experts gathered in Texas this month for LCI Congress 2019. Here are key takeaways from the event.
Giants 400 | Oct 25, 2019
Top 55 Airport Sector Construction Firms for 2019
Hensel Phelps, AECOM, Turner, Skanska, and PCL top the rankings of the nation's largest airport terminal sector contractors and construction management firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Oct 24, 2019
Top 80 Retail Construction Firms for 2019
PCL, VCC, Whiting-Turner, Shawmut, and W.E. O'Neil top the rankings of the nation's largest retail sector contractors and construction management firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Contractors | Oct 24, 2019
Get them while they’re young: programs that promote the construction industry target students
Turner uses one of its jobsites in Nashville to immerse middle-school teachers in the ins and outs of building.
Contractors | Oct 17, 2019
Are contractors collecting what they need to make better decisions?
Research focused on five key types of data: project progress, manhours, productivity, safety, and equipment management.
Architects | Oct 11, 2019
SMPS report tracks how AEC firms are utilizing marketing technology tools
With thousands of MarTech tools and apps on the market, design and construction firms are struggling to keep up.
Healthcare Facilities | Oct 4, 2019
Heart failure clinics are keeping more patients out of emergency rooms
An example of this building trend recently opened at Beaumont Hospital near Ann Arbor, Mich.
Giants 400 | Oct 3, 2019
Top 10 Convention Center Sector Construction Firms for 2019
Lendlease, Turner, Clark, and Webcor top the rankings of the nation's largest convention center sector contractors and construction management firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Oct 3, 2019
Top 65 Cultural Sector Construction Firms for 2019
Whiting-Turner, Turner, PCL, Clark Group, and Gilbane top the rankings of the nation's largest cultural facility sector contractors and construction management firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Oct 3, 2019
2019 Cultural Facility Giants Report: New libraries are all about community
The future of libraries is less about being quiet and more about hands-on learning and face-to-face interactions. This and more cultural sector trends from BD+C's 2019 Giants 300 Report.
