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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

Thursday, June 4, 2015

Contractor Charged In $6.9 Million Con Ed Bribery And Kickback Scheme

Defendant Regularly Paid Con Ed Supervisors In Exchange For Lucrative Contracting Work

Rodolfo Quiambao, the President and Chief Executive Officer of the engineering and design firm Rudell & Associates, Inc. (Rudell), was arrested this morning on charges of providing over $6.9 million in bribes and kickbacks to supervisors of Consolidated Edison of New York (Con Ed) in exchange for receiving lucrative contracts from the public utility services provider. The defendant’s initial appearance is scheduled later today before United States Magistrate Judge Marilyn D. Go, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges and arrest were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Raymond R. Parmer, Jr., Special Agent-in-Charge of U.S. Immigration and Custom Enforcement (ICE), Homeland Security Investigations (HSI), in New York; Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), New York; and Michael Nestor, Inspector General, The Port Authority of New York and New Jersey, Office of the Inspector General.

Quiambao’s arrest is the latest part of the government’s continuing investigation of bribery and kickback schemes involving employees of Con Ed. In January 2009, ten Con Ed supervisors and one employee were charged with collectively receiving more than $1 million in kickbacks from contractors; all eleven later pled guilty to federal offenses.

As alleged in the criminal complaint unsealed today, for over a decade beginning in as early as 2000, Quiambao, whose company specializes in electrical design, surreptitiously and regularly provided three Con Ed supervisors with over $6.9 million in cash and checks in exchange for securing contracting work for his company.

From at least 2007 to 2011, Quiambao – acting through his company, Rudell – allegedly provided over $6.5 million in checks to a company owned by a Con Ed Section Manager who oversaw various projects within Con Ed’s Electrical/Controls Systems Design section. In 2007 and 2008, Rudell issued approximately 120 checks to the Section Manager’s company, totaling approximately $2.7 million. Beginning in January 2009 – after the announcement of the arrests of Con Ed supervisors for taking kickbacks – Quiambao is alleged to have attempted to conceal his illegal payments, instead issuing checks from Rudell to Rudicon Power Corp. (Rudicon), another company that Quiambao owned and which did no work for Con Ed, and then issuing checks from Rudicon to the Section Manager’s company in the same amount as the checks from Rudell to Rudicon. Throughout 2009 and 2010, Rudicon paid the Section Manager’s company approximately $3.7 million in some 146 checks. The memo lines of the Rudell to Rudicon checks, and the corresponding Rudicon to the Section Manager’s company checks, often listed the same Con Ed project.

Throughout the same years, the Section Manager steered Con Ed work to Rudell, supported the awarding of lucrative Con Ed contracts to Rudell, and reviewed and authorized payments to Rudell under those contracts. During this time period, Rudell received approximately $30 million in payments from Con Ed that were approved by the Section Manager.

The complaint also alleges that, from approximately 2003 to 2010, Quiambao provided approximately $200,000 in cash kickbacks to a Con Ed Section Manager in the Construction Public Improvement (CPI) unit. The CPI Section Manager oversaw engineering construction projects and had influence over the awarding of contracts to outside contractors like Rudell. Approximately once per month or every two months, Quiambao provided the CPI Section Manager with an envelope of cash. In exchange, the CPI Section Manager reviewed, edited, and provided advice regarding Rudell’s bid proposals before Rudell submitted them to Con Ed. The CPI Section Manager also steered Con Ed work to Rudell and supported the awarding of “sole source” contracts to Rudell.

The complaint further alleges that, from approximately 2000 to 2010, Quiambao provided at least $240,000 in kickbacks to a Con Ed Engineering Supervisor in the Mapping Department. During that time period, Rudell was awarded numerous Mapping Department contracts in the amount of approximately $6.9 million. Approximately once per month, Quiambao gave the Engineering Supervisor checks from Rudell – and, after the January 2009 arrests, from Rudicon, which had received the same amounts from Rudell – made out to a company owned by the Engineering Supervisor and which Quiambao had suggested and assisted in setting up to facilitate the illegal payments. Consistent with the defendant’s modus operandi, the memo lines of the Rudell to Rudicon checks, and the corresponding Rudicon to the Engineering Supervisor’s company checks, often listed the same Con Ed projects, projects which were supervised by the Engineering Supervisor. The Engineering Supervisor steered Con Ed projects to Rudell, supported the awarding of sole source contracts to Rudell, and recommended Rudell to other Con Ed employees.

“For more than a decade, Rodolfo Quiambao allegedly played dirty to make sure he received the contracts, and millions of dollars, that he wanted. And, ordinary New Yorkers, who rely on Con Ed for electricity, gas, and steam, bore the costs,” stated Acting United States Attorney Currie.

“Today’s arrest is one more domino to fall in a long line of Con Ed employees and contractors involved in systematic corruption that has left the consumer to foot the bill through higher rates,” said HSI New York Special Agent-in-Charge Parmer. “HSI remains committed to working with our law enforcement partners to investigate and expose money laundering activities regardless of the scheme.”

“Like any other purchaser of goods or services, Con Ed customers expect to pay fair rates for their utilities. Customers ultimately pay for corrupt bidding practices in the form of higher prices, or in the case of utilities, higher rates. Just as IRS Criminal Investigation is committed to ensuring that everyone pays their fair share of taxes, we will work with our law enforcement partners on bribery and kickback scheme investigations, sharing our financial investigative expertise to ensure that businesses play fairly and that customers get what they pay for,” stated Special Agent-in-Charge Kitchen of IRS-CI.

“The conduct charged against Quiambao, the subject in today’s announcement, is egregious in its nature, duration, and its scope. Further, the conduct was particularly brazen in that he allegedly took steps to hide his scheme, and yet continue the scheme, even while others were arrested in this investigation. The Port Authority Inspector General will continue to work cooperatively with its law enforcement partners to root out systematic corruption in the construction industry,” stated Inspector General Nestor of The Port Authority.

If convicted, Quiambao faces a maximum sentence of ten years’ imprisonment and a $250,000 fine.

The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Lan Nguyen and Tali Farhadian are in charge of the prosecution.

The Defendant:


Age: 71

Queens, New York

E.D.N.Y. Docket No. 15 M 475

Updated July 2, 2015