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
| Aug 12, 2014
Vietnam's 'dragonfly in the sky' will be covered in trees, vegetation
Designed by Vietnamese design firm Vo Trong Nghia Architects, the building will be made up of stacked concrete blocks placed slightly askew to create a soft, organic form that the architects say is reminiscent of a dragonfly in the sky.
| Aug 12, 2014
Design firms invited to submit qualifications for St. Petersburg, Fla., waterfront project
The city of St. Petersburg, Fla., invites firms to submit their ideas for a new and improved pier for Florida's fifth largest city.
| Aug 11, 2014
Air Terminal Sector Giants: Morphing TSA procedures shape terminal design [2014 Giants 300 Report]
The recent evolution of airport terminals has been prompted largely by different patterns of passenger behavior in a post-9/11 world, according to BD+C's 2014 Giants 300 Report.
| Aug 11, 2014
Will Alsop's funky 'high-rise on stilts' will be built over an apartment building in London
South London's riverfront will soon be graced by one of Will Alsop's eccentric designs: a curved apartment tower on purple stilts.
| Aug 5, 2014
Shigeru Ban-designed Aspen Art Museum will open doors to public this week
After 18 month of planning and construction, the museum will open its new Shigeru Ban-designed facility to the public on August 9.
| Aug 5, 2014
Construction economists optimistic about 2014 growth
Anirban Basu, Kermit Baker and David Crowe provided a collaborative economic forecast combining their expert economic analysis on leading, present and lagging economic indicators.
| Jul 30, 2014
Nonresidential building activity on the rise for 2015: AIA Forecast
Semiannual Consensus Construction Forecast predicts 4.9% increase this year, 8% next year, with offices and retail facilities leading the charge.
| Jul 29, 2014
AECOM's buying spree continues: Deal to acquire Hunt Construction Group in the works
The acquisition comes just two weeks after AECOM's $6 billion deal to acquire rival engineering and construction company URS Corp.
| Jul 28, 2014
Reconstruction market benefits from improving economy, new technology [2014 Giants 300 Report]
Following years of fairly lackluster demand for commercial property remodeling, reconstruction revenue is improving, according to the 2014 Giants 300 report.
| Jul 28, 2014
Reconstruction Sector Construction Firms [2014 Giants 300 Report]
Structure Tone, Turner, and Gilbane top Building Design+Construction's 2014 ranking of the largest reconstruction contractor and construction management firms in the U.S.
