Fraud in the News

Fraudsters fake diversity hires to win contracts and more

Fraudsters fake diversity hires to win contracts

The Manhattan district attorney indicted eight people and six construction companies in May for fraud and corruption after they lied about hiring minority- and women-owned businesses (MWBE) to win lucrative government contracts.

According to prosecutors, Lawrence Wecker, owner of drywall and carpentry company JM3 Construction, project manager Michael Speier and other co-conspirators falsified business records to obtain government-subsidized affordable housing contracts by listing minority- and women-owned contractors in their records. In reality, they used non-MWBE contractors and put actual MWBE companies at a disadvantage.

Wecker and his company also allegedly stole money from subcontractors and fixed bids for construction projects so that they’d be awarded projects with inflated costs, scamming the New York State Insurance Fund out of more than $2 million. (See “Construction fraud scheme faked ties to minority, women-owned businesses: Manhattan DA,” by Aaron Katersky and Teddy Grant, ABC News, May 2, 2023.)

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