Two men have been charged with wire fraud in connection with a conspiracy to overbill the City of New York.
The defendants are charged with overbilling various city agencies for more than a decade in connection with contracts to repair and maintain fire alarm systems, according to a news release from the United States Attorney Office for the Eastern District of New York.
An indictment was unsealed on Thursday in federal court in Brooklyn.
Walter Stanzione, 65, of East Meadow, N.Y., was scheduled to be arraigned before United States Magistrate Judge Cheryl L. Pollak.
William Neogra, 63, of Millsboro, Delaware, was to be arraigned before United States Magistrate Judge Laura D. Hatcher in the District Court of Delaware.
“As alleged in the indictment, the defendants were hired to make sure that the fire alarm systems in hundreds of New York City buildings functioned safely and effectively,” said Breon Peace, United States Attorney for the Eastern District of New York. “The defendants took this as an opportunity to steal and defraud, abusing and betraying their obligations.”
The indictment alleges the defendants overbilled agencies including the Department of Citywide Administrative Services, the Department of Education, the Department of Environmental Protection, and the Department of Sanitation, by submitting fraudulent invoices reflecting inflated prices.
“Their alleged crimes milked the city of valuable resources. They got used to getting paid more for less, but today it caught up to them,” said James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“The defendants in this case took money out of the pockets of hard-working New Yorkers,” added Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI).
The indictment alleges the defendants exercised control over Fire Alarm Electrical Corp., which submitted fraudulent invoices with dramatically inflated prices, including invoices that purported to be from legitimate retailers, which the defendants had altered and modified, as well as invoices from shell companies that the defendants owned and controlled.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Erik Paulsen and Michael Gibaldi are in charge of the prosecution.
None of the allegations have been tested in court and the defendants are considered innocent unless proven guilty.
The defendants face maximum sentences of 20 years’ imprisonment.