The US Attorney's Office has filed charges against three businesses for defrauding the Rochester schools modernization program.
Journee Construction Inc., Bell Mechanical Contractors, and Kaplan Schmidt Electric were under investigation relating to the improper use of "pass through" minority contractors, according to a statement released Tuesday from US Attorney James Kennedy, Western District of New York.
Kennedy's statement alleges that the three companies conspired with contractors between April 2013 and November 2013 and submitted required documents that "falsely and fraudulently represented that contractors hired for program projects had compiled with the Diversity Plan established for the program. "
"In truth and fact," the statement says, "the contractors did not comply, and did not intend to comply."
The government entered into a deferred prosecution agreement with each of the defendants with terms each of them must meet: fully cooperate with the government's ongoing investigation and conduct all of future business in compliance with all laws and regulations.
The three companies are also required to pay financial penalties: Journee Construction will pay $70,000; Bell Mechanical Contractors will pay $50,000; and Kaplan Schmidt Electric will pay $25,000.
The charges will be dismissed if the companies comply with all terms of their agreement.
The Rochester office of the FBI is conducting the probe into the schools modernization project contractors.
The schools modernization project is a $1.2 billion construction project now in its third phase. The mammoth project, which began more than a decade ago, has fully renovated many city schools, including East Upper and Lower, School 58, School 16, and Monroe High School. The state has reimbursed much of the cost of the project.
A key component of the project was providing job training and employment for minority contractors, some of whom were too small to meet all the requirements needed, so they became subcontractors for larger firms.
Kennedy's statement said that the charges against the companies means that they have only been accused of a crime, but they are presumed innocent until and unless proven guilty.
Tim Macaluso is a CITY Newspaper reporter.