(The following story by Luis Perez, Karen Freifeld and Joshua Robin appeared on Newsday?s website on December 17.)
NEW YORK — In one of the biggest MTA corruption schemes ever, six people, including three transit officials, were charged yesterday with bilking the agency out of millions of dollars.
The suspects, including the reputedly mob-tied mom-pop nd-son Figliolia Plumbing Co. of Brooklyn, allegedly overcharged the Metropolitan Transportation Authority for labor and materials used for plumbing renovations at the agency’s properties, including its headquarters on Madison Avenue.
The Figliolias then plowed the taxpayer and fare-payer money into luxury purchases such as a $3.8-million restoration of their 9,500-square-foot Holmdel, N.J., mansion, hundreds of pieces of jewelry and $4 million in “walking around money,” Manhattan District Attorney Robert Morgenthau said in announcing the six arrests yesterday.
Investigators found a corruption trail dating to 1998 during an 18-month probe, but they could not determine precisely how much was swiped in the contractor’s eight- year history with the MTA, Morgenthau said.
The district attorney is seeking full restitution of $18.7 million from the suspects, representing the amount the MTA paid the firm from Jan. 1, 1999, to Nov. 5, 2002.
At their arraignment last night, the six defendants pleaded not guilty after assistant district attorney Patrick Dugan told the judge that Alex Figliolia Sr. is “a friend and close business associate” with Alan Longo, an imprisoned captain of the Genovese crime family.
The Figliolias’ attorney, Ron Aielo, described the charges as “outrageous” and added that Alex Figliolia Sr. “counts among his friends some of the most important business leaders of the city.”
The MTA could not fully explain how such chronic overcharging and bribe-taking could have transpired under its watch, except to blame it on the three managers who breached the agency’s trust.
MTA executive director Katherine Lapp said her agency, with a $7-billion annual operating budget, is “as vigilant as possible” against theft. “We want to make sure that fare-payers pay for the services we provide, not for MTA employees’ wrongdoings,” she said.
The arrests came two days before the MTA board was slated to approve the elimination of about 1,000 positions in a cost-savings measure. They also came as the authority is considering reducing discounts on unlimited-ride MetroCards to stem deficits expected to hit in 2005.
In a 116-count indictment, Morgenthau said the three principals of Figliolia Plumbing allegedly billed the MTA at the prevailing wage of at least $65 an hour while actually paying workers as little as $8 to $20 an hour.
The contractors also allegedly inflated the cost of materials by as much as 5,000 percent. A quarter-inch brass fitting, for instance, purchased for 49 cents, was billed to the MTA at $24.98.
The family business also was involved in laundering its illegally gained proceeds, Morgenthau said.
All six defendants are charged with enterprise corruption, a felony punishable by up to 25 years in prison.
The contractors were identified as Alex Figliolia, Sr., company president; his wife, Janet Figliolia, vice president; and their son, Alex Jr., vice president. The three are also charged with bribery.
Charged with bribe-taking and second-degree grand larceny are Howard Weissman, the MTA’s former director of facility operation and support; Ronald Allan, the agency’s facilities manager, and MTA building manager Gary Weissbard.
Weissman, who earned a salary of $124,000 a year, was allegedly bribed with $550,000 in all. Allan earned $77,000 and was allegedly bribed with $65,000. Weissbard made $71,000 a year and allegedly pocketed $10,000.
The Track to Theft
Highlights from the charges in a 116- count indictment that alleges millions were stolen from the Metropolitan Transporation Authority from 1998 to 2002 by current and former MTA officials and a Brooklyn plumbing company:
PIPE-DREAM WAGES
Figliolia Plumbing is accused of billing the MTA at least $65 an hour while paying employees as little as $8 an hour and pocketing the difference – at least $1,156,679.41.
MATERIAL DIFFERENCES
Figliolia Plumbing, prosecutors say, billed about $1.4 million for materials while paying its supplier just $594,000, reaping the rest – $806,000. For such items as a “2-1/2 x 4-1/2 inch brass nipple,” Figliolia paid $23.56 apiece and the materials were billed to the MTA at $325.24 each.
BRIBES
Allegations include $550,000 in cash, jewelry and free trips for MTA facility operation and support director Howard Weissman; $65,000 for MTA facilities manager Ronald Allan; and $10,000 in “benefits and rewards” for MTA building manager Gary Weissbard.
TOTAL REPAYMENT
SOUGHT FROM DEFENDANTS:
$18,698,195.82
PERSONAL LUXURIES
Prosecutors say $800,000 worth of jewelry – gold and diamond necklaces and rings, pearl chokers, jewel-encrusted watches, gold stickpins, earrings and brooches – was among the defendants’ purchases.
NEW JERSEY MANSION
Figliolia Plumbing principals allegedly used stolen money to fund the $3.8-million restoration of their 9,500- square-foot mansion in Holmdel, N.J. It hs two safes, indoor and outdoor freestanding pizza ovens, a solarium and a man-made pond.