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
Office Buildings | Jun 12, 2015
Houston's energy sector keeps office construction humming
Colliers International projects continued expansion this year in its quarterly report on national office market.
Smart Buildings | Jun 11, 2015
Google launches company to improve city living
The search engine giant is yet again diversifying its products. Google has co-created a startup, called Sidewalk Labs, that will focus on “developing innovative technologies to improve cities.”
Contractors | Jun 8, 2015
ABC: 49 states report decline in construction unemployment rate
Five Plain States reported the lowest unemployment rates for construction workers in April.
Contractors | Jun 5, 2015
FMI's quarterly survey finds contractors mostly optimistic about their growth
The overall economy, as well as the economy in which they do business, might be down, but contractor panelists who provided these insights still see nonresidential construction on the upswing, according to FMI’s latest report.
Contractors | Jun 2, 2015
Weather to blame for decline in Construction Backlog Indicator
Following an intense winter season, the Associated Builders and Contractors' Construction Backlog Indicator (CBI) revealed a 3.2% decline during the first quarter of 2015.
Contractors | Jun 1, 2015
Nonresidential construction spending surges in April
Nonresidential construction is up by a solid 8.8% over the past year, consistent with ABC's forecast of high single-digit growth.
Multifamily Housing | Jun 1, 2015
Sacramento moves forward on multifamily project with new modular supplier
Guerdon Modular Buildings will provide modules for 118 apartments.
BIM and Information Technology | May 27, 2015
4 projects honored with AIA TAP Innovation Awards for excellence in BIM and project delivery
Morphosis Architects' Emerson College building in Los Angeles and the University of Delaware’s ISE Lab are among the projects honored by AIA for their use of BIM/VDC tools.
Healthcare Facilities | May 27, 2015
Rochester, Minn., looks to escape Twin Cities’ shadow with $6.5 billion biotech development
The 20-year plan would also be a boon to Mayo Clinic, this city’s best-known address.
BIM and Information Technology | May 21, 2015
How AEC firms should approach BIM training
CASE Founding Partner Steve Sanderson talks about the current state of software training in the AEC industry and common pitfalls in AEC training.
