Niagara Falls Contractor pleads guilty to conspiring the defraud HUD
Buffalo, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Walter Heinrich Weiss, 61, of Niagara Falls, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara, to conspiring to make a false statement in a U.S. Department of Housing and Urban Development (HUD) transaction. The charge carries a maximum penalty of one year in prison, a fine of $100,000.00 or both.
First Assistant U.S. Attorney James P. Kennedy, Jr., who is handling the case, stated that the defendant was an employee of John Gross at David Gross Contracting, (DGC) Inc. On March 24, 2009, there was a significant water main break during which approximately 750,000 gallons of water flooded several streets in the City of Niagara Falls. Following the flood, the Niagara Falls Department of Community Development (NFDCD) began notifying residents and home owners in the area affected by the flooding of the types of damage for which they may be allowed to receive grant funds to cover the cost of the repairs. Because the water damage repairs were deemed emergency repairs, NFDCD instructed affected residents and home owners to obtain bids from more than one contractor for the repairs.
One of the affected homes was flooded with approximately four feet of water and sustained significant damage. That resident contacted DGC for an estimate, and in addition to submitting their own successful bid for the repair work on the resident’s home, DGC also submitted, unbeknownst to the homeowner, a false and fraudulent bid for such repairs purporting to be from a DGC competitor. Such a bid was more expensive than that submitted by DGC and was submitted by DGC to the NFDCD with an intention to manipulate and defraud the grant program. DGC ultimately received the job and was paid $2,545.00 in NFDCD funds. The United States Department of Housing and Urban Development (HUD) provided funds to the NFDCD to cover emergency repairs caused by the water main break.
First Assistant U.S. Attorney Kennedy stated that it was part of the conspiracy that DGC would maintain, within their offices, and on their computers, blank letterhead for various companies which were its’ competitors. The defendant knew and agreed that such documents would from time to time be used by employees of DGC, in order to prepare false and fraudulent bids for certain jobs by DGC as part of any competitive bidding process. Included amongst those fraudulent bids, was a bid for repairs for water damages for the resident previously mentioned.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Toni Weirauch, Special Agent-in-Charge.