LI man among 5 charged in NYC kickbacks

A prominent Manhattan construction company and four top executives, including a Long Island man, were charged Wednesday with defrauding clients of more than $30 million through a billing scam.

Steven Wasserman, 58, of Freeport, his company Lehr Construction, and three other senior officials were charged with Enterprise Corruption, fraud and grand larceny in an indictment announced by Manhattan District Attorney Cyrus Vance.

In the scheme, the company allegedly had subcontractors overcharge clients in cases where it was receiving a percentage of the project cost as a construction manager, and then made them undercharge on projects where it was a receiving a lump sum as general contractor.

The scam effectively maximized Lehr's profits on both types of deals and cost clients at least $30 million between 1998 and 2010, according to the charges.

"This construction company was corrupt at all levels," Vance said.

Lehr has been a leader in interior renovation projects in Manhattan. Wasserman is the company's Chief of Estimating and Cost Control.

Also charged were executive vice president and director Jeffrey Lazar, 43, of New York City, vice president for operations Todd Phillips, 52, of New York City, and finance director Steven Halper, 67, of Franklin Lakes, N.J.

The charges were not unexpected. The district attorney's office has made the interior construction industry the target of previous cases and corruption probes, and Lehr's offices were raided last year.

Vance said scams in the industry, going back decades, damage the city's business climate by making it unnecessarily expensive.

"Greed and corruption impose a hidden, billion-dollar-a-year tax on New York City's construction industry," Vance said, promising to "continue to pursue aggressive investigations to make sure that honest businesses can compete in this vital industry."

The defendants pleaded not guilty and were released on bail at an arraignment in Manhattan Supreme Court Wednesday.

Wasserman's lawyers did not return a call for comment. A spokeswoman for Lehr Construction said its business was damaged by the anticipated charges, and it had filed for bankruptcy protection in February while it winds down.