AG: Lindenhurst building firm overbilled NY

Kenneth Buddenhagen is the vice president of the

Kenneth Buddenhagen is the vice president of the Lin-Kim Co. (March 10, 2008) (Credit: Jim Peppler)

A Lindenhurst construction company and its key officials are permanently barred from taking public work in New York after investigators concluded it had been "systematically overbilling" the state on emergency prison repairs.

Under the settlement with Attorney General Eric T. Schneiderman, Lin-Kim Co. and the family that owns it also agreed to pay $390,000, double the amount in padded bills sent to the state between January 2006 and December 2008.

In return, Lin-Kim president Linda Gregorio, 57, her husband and vice president Kenneth Buddenhagen, 57, and bookkeeper Melissa Peters, 37, Gregorio's daughter, did not have to admit to wrongdoing.

State investigators said their practices included misclassifying workers' titles in more than 500 instances so they could charge higher rates, inflating hours worked and double-billing on equipment rentals.

In one case, investigators said the firm's invoice listed four plumbers instead of lower-paid laborers, adding nearly $2,000 to the bill -- despite a state engineer's written objection to the misclassification on the invoice.

"My clients conducted business the way it had been conducted for generations," said Stephen W. Kretz, the Lindenhurst attorney representing Gregorio and Buddenhagen.

He declined to answer questions, saying the settlement bars the parties involved from talking about the deal, a point disputed by Schneiderman's office and Peters' attorney, Stephen Preziosi of Manhattan.

Preziosi said there was no "criminal act" in what happened and that his client simply "took orders from above."

The damages will be taken out of payments to the company that the state froze in 2008.A Bank of America lien filed against Lin-Kim on a $133,000 loan will also be paid from state payments owed to the company for its repairs at prisons, including one in Otisville and another on Staten Island, according to the settlement.

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