Exclusive: Overbilling Scheme, Lawsuits Involving Bronx Courthouse Cost Taxpayers Millions

Credit: Rafael Viñoly Architects

By Kevin Deutsch and Sasha Gonzales
[email protected], [email protected]

New York taxpayers were bilked out of millions of dollars as part of a massive overbilling scheme involving the Bronx Hall of Justice—one of a host of missteps that led to over $100 million in cost overruns and years of litigation involving the project, Bronx Justice News has learned.

In addition to over-billing the state Dormitory Authority, Bovis Lend Lease, the original construction manager for the project, admitted to defrauding the agency by falsely claiming it was using a minority owned subcontractor to perform work on the courthouse—a lie that helped Bovis earn the original contract, according to records filed in the U.S. District Court’s Eastern District.

Bovis’ overbilling of the Dormitory Authority—a public benefit corporation responsible for erecting new government buildings in New York—was one of numerous issues that contributed to delays and shoddy construction work at the Hall of Justice. New York City contracted with the Dormitory Authority to construct the 775,000 square-foot building, one of the largest courthouses in America.

The authority wound up suing more than 17 companies it had contracted with for the project, including the courthouse’s primary architects, electricians, and audio-visual equipment installers, according to federal court records.

The state, in turn, was sued by a number of contractors. The authority paid millions to settle some of those claims, and recovered money from judgements and settlements involving others, the records show.

The litigation, lasting from 2007 until 2013, was among the most protracted and expensive court battles the state has ever fought.

Details of the lawsuits and settlements, which included a $5.2 million payout by the state to Hugh O’ Kane Electric Co. and a $2.4 million payout to Five Star Electric Corp., have not previously been reported.

Among the monies recovered by the state in the litigation was a $100,000 judgement from Long Island-based Materials Testing Lab. The company’s inspectors signed off on a 75-foot canopy at the courthouse’s entrance, which was later removed after a different team of inspectors deemed it unstable.

The original inspectors were not certified to perform the work, officials said at the time. A criminal investigative referral was made to the Bronx District Attorney’s Office, as well as to federal prosecutors, but no charges were brought against the company.

The courthouse project’s construction manager, Australia-based Bovis Lend Lease, has since rebranded as Lend Lease. It paid $56 million in fines and restitution in 2012 to avoid criminal prosecution in the overbilling case.

A Bronx Justice News investigation last month revealed years of government waste, infrastructure problems, and delays at the Hall of Justice. In response, City Councilman Ritchie Torres, chair of the council’s Oversight and Investigations Committee, has announced a referral to the Department of Investigation—a move that triggers an official probe under city law.

“The public has a right to know why….hundreds of millions of their tax dollars has been so badly spent, and why this massive complex was so poorly planned and so poorly constructed,” Torres told reporters at a press conference in front of the building’s still-shuttered civic plaza Friday.

Torres’ committee has jurisdiction over DOI.

This is a developing story. Check back for updates.

About Kevin Deutsch 265 Articles
Kevin Deutsch is a Staff Writer for Bronx Justice News covering the criminal justice system, drugs, and DNA use by law enforcement. An award-winning journalist, Deutsch is the author of the true crime books "Pill City" and "The Triangle." He has worked on staff at the Daily News, Miami Herald, Newsday, The Palm Beach Post, and The Riverdale Press. His work has also appeared in Newsweek, Columbia Journalism Review, The New York Times, The Village Voice, The Forward, The Independent, Huffington Post, Orlando Sentinel, and the New York Post, among other publications. His numerous television appearances include spots on CNN, MSNBC, and C-SPAN's BookTV. He has also been featured in The New Yorker. A Bronx resident, Deutsch hosts the true crime podcast "A Dark Turn" on the Authors on the Air Global Radio Network.