Former President of Perini Corp. Civil Division Convicted in $19 Million Disadvantaged Business Entities Fraud
Following a four-week trial, a federal jury in Brooklyn yesterday found Zohrab B. Marashlian, the former president of Perini Corp.’s Civil Division, an international construction services corporation, guilty of fraud and conspiracy to launder money. The charges arose out of Marashlian’s false representations to New York government agencies that Disadvantaged Business Entities (DBEs) were performing work in connection with major public works contracts, when, in reality, Marashlian had non-disadvantaged businesses favored by Perini Corp. do the work.
The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Charles R. Pine, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation Division, New York Field Office, Ned E. Schwartz, Special Agent-in-Charge, U.S. Department of Transportation, Office of Inspector General, New York, Robert L. Panella, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Region, and Rose Gill Hearn, Commissioner, New York City Department of Investigation.
The New York City and State DBE programs were intended to offer an economic incentive to general contractors to make good faith efforts to hire contractors that were historically excluded from construction industry. The public works contracts at issue in this case included work done on the West Side Highway, the Long Island Expressway, the Brooklyn-Queens Expressway, the Williamsburg Bridge, and Queens Boulevard, among others. The New York State Department of Transportation and the New York City Department of Transportation administered those contracts between 1994 and 2007 at a cost of over $19 million in taxpayer funds. The government’s evidence established that while Marashlian was President of Perini Corp. Civil Division, he and others used front companies to falsely certify that construction work was performed by DBEs. As a result, Marashlian fraudulently won public works contracts from the government and also gained $14 million in salary and personal bonuses.
“This prosecution and verdict should send a message to all in the contracting industry that taxpayer dollars must be appropriated in a way to foster fair competition through the DBE programs,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to each of the agencies who participated in the government’s investigation.
When sentenced by United States District Judge Frederick Block, Marashlian faces a maximum sentence of 20 years’ imprisonment for mail fraud and conspiracy to commit money laundering; and five years’ imprisonment for conspiracy to commit mail and wire fraud, and a fine of up to $23 million. The government is also seeking criminal forfeiture of over $11.5 million.
This case resulted from an investigation by the Federal Construction Fraud Task Force, a multi-agency group formed by the United States Attorney’s Office to investigate corruption in federally funded public works contracts.
The government’s case was prosecuted by Assistant United States Attorneys Burton T. Ryan, Jr. and Karen R. Hennigan.
ZOHRAB B. MARASHLIAN
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