National Grid wants $4.5M restitution in kickback scheme

National Grid is requesting that five former employees who pleaded guilty to federal charges in a kickback scheme last year pay more than $4.5 million in restitution, including salary and benefits earned during the time the men were accused of carrying out the multiyear bribery scheme.

In a filing in federal court last month, the London-based natural gas supplier charged the men "subverted" the company’s procurement process by "accepting bribes in exchange for steering certain facilities construction and maintenance contracts to particular vendors and by threatening to cease awarding contracts in the absence of such bribe payments …"

The U.S. Attorney’s Office, which investigated and prosecuted the case, first detailed the scheme in a multi-count indictment in June.

National Grid said the conduct, to which each man has pleaded guilty to a single count of violating the Travel Act, caused "significant damage" to the company and "tarnished the good name and honest reputation of National Grid and its employees," while "impair[ing ] … its relationships with business partners, investors and regulators."

In a memorandum of law dated Jan. 22, the company asked the federal court for restitution from the men amounting to $4.53 million in back wages and another $250,048.50 for its legal costs in responding to the probe, including "assisting the government in its prosecution of these offenses."

The amount National Grid is seeking is considerably more than the $1.12 million in restitution the men already have agreed to make.

The men, Richard Zavada, Patrick McCrann, Jevan Seepaul, Ricardo Garcia and Devraj Balbir, are awaiting sentencing. Two had been scheduled for sentencing last month, but it was postponed.

Lawyers for some of the men, in court filings, argued against National Grid receiving restitution, noting that the company did not take issue with the government’s conclusion that found "no evidence that contract prices were inflated to facilitate kickback payments, or that National Grid ever paid more than fair market value" for the services received from vendors tied to the scheme. Calls to the lawyers on Monday were not returned.

The filings don’t mention the vendors, but in response to Newsday questions last year, National Grid said it no longer did business with a Yaphank-based former construction and maintenance contractor, the East End Group, whose lawyer, Glen Kopp, has declined to comment.

Each of the former employees pleaded guilty to a violating the Travel Act, National Grid said, adding, "In other words, they knowingly and intentionally used a facility of interstate commerce to promote and carry on unlawful activity, here, commercial bribery.

The memorandum says Zavada, a 33-year company employee, received "multiple recreational vehicles, hotel and travel accommodations for overseas vacations, landscaping and other personal expenses" as bribe payments, along with $300,000 in cash seized from his home. He agreed to forfeit $517,635, the National Grid filing states.

McCrann, a 37-year company veteran, accepted $90,000 worth of home renovations, and agreed to forfeit $200,000, the filing states, citing court transcripts. A government filing recommends that McCrann receive a sentence of 18 to 24 months in prison. His family members, citing care of his wife, among other factors, argued against a prison term.

Balbir, a five-year employee, accepted "at least" $100,000 in home improvements and agreed to forfeit $191,865, the filing states.

Garcia accepted payments using credit cards issued to the contractor’s name, including for college tuition payments totaling more than $30,000 and travel expenses, and agreed to forfeit $100,244.58.

Seepaul accepted cash and $100,000 in home improvements and agreed to forfeit $111,160.09, the filing states.

National Grid, in a statement to Newsday Monday, said it has "committed that our customers will bear no costs associated with the wrongdoing by these former employees and any restitution we receive will be returned to customers. We take this very seriously and are holding them accountable to our colleagues and our customers."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.