NYC Developer Sentenced, Fined in Mob Kickback Scheme

Several years ago Frederick Contini realized that resistance would do him no good. The developer of the New York State Metropolitan Transit Authority’s (MTA) new headquarters, located at 2 Broadway, pleaded guilty to various federal charges in March 2003 and July 2004. Now he’s been handed the tab. This July 11, Contini was sentenced in U.S. District Court for the Eastern District of New York to five years probation and ordered to make more than $8 million in restitution. The punishment was based on his guilty plea of March 31, 2003 to conspiracy to receive, possess and dispose of money obtained by fraud and transported across state lines, obstruction of justice, and engaging in unlawful monetary transaction.

According to court records, Contini had hired employees from International Union of Elevator Constructors (IUEC) Local 1 and International Union of Operating Engineers (IUOE) Local 14. These “workers” proved to be fictitious. He billed the MTA for $14.3 million to cover the ghost-worker payroll, nearly $10 million above actual labor costs, and laundered the proceeds through shell companies controlled by the Gambino crime family, in particular soldiers Edward Garafola and his son, Mario Garafola. The project was part of a large Gambino project network. Several dozen of its members eventually were indicted for fraud, extortion and kickbacks. Contini’s sentencing follows a joint investigation by the U.S. Labor Department’s Office of Labor-Management Standards, the FBI and several officials of IUEC Local 1. (OLMS, 7/16/07).