Repair Contractor Charged In Manhattan Federal Court With Overbilling New York City Department Of Education
Preet Bharara, the United States Attorney for the Southern District of New York, and Richard J. Condon, Special Commissioner of Investigation for the New York City School District (“SCI”), today announced federal charges against DERVAL LAZZARI, a/k/a “Eduardo,” for allegedly engaging in a scheme that used two companies he and others owned and controlled (the “Acme Companies”) to defraud the New York City Department of Education (the “DOE”) by submitting over $1 million of fraudulent invoices for supposed repair work. LAZZARI, a native of Argentina, was arrested at JFK Airport Thursday morning by criminal investigators from the United States Attorney’s Office after arriving on a flight from Argentina. He was presented in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn Thursday afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Derval Lazzari cheated the New York City Department of Education and the children it educates by submitting fraudulent invoices for repairs to New York City schools. Particularly now, as New York City expands pre-kindergarten education, those individuals tempted to take for themselves funds intended for children should know that they will be caught and prosecuted.”
SCI Special Commissioner Richard J. Condon said: “The arrest of Lazzari by the Southern District investigators is a significant step towards the recovery of stolen educational funds.”
According to the allegations in the Complaint unsealed yesterday in Manhattan federal court:
The Acme Companies were contracted by the DOE to repair and service kitchen equipment and electrical outlets at New York City Schools between 2006 and 2013. During this time, LAZZARI and others engaged in a scheme to systematically bill the DOE for: (a) vastly more expensive replacement parts than were actually installed; (b) parts that were never used; and (c) services that were either unnecessary and/or never performed. For example, LAZZARI caused the Acme Companies to repeatedly bill the DOE $572 for a circuit breaker estimated to cost $18. The Acme Companies also billed the DOE at least 8,000 times for expensive “leak tests” for refrigerators that were never performed.
LAZZARI, 54, of Queens, New York, is charged with wire fraud and conspiracy to commit wire fraud. If convicted, he faces a maximum of 20 years in prison on each count. LAZZARI also faces a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the Special Commissioner of Investigation for New York City’s Department of Education. Mr. Bharara also thanked the Criminal Investigators with the United States Attorney’s Office, as well as Customs and Border Protection for their assistance in tracking and apprehending LAZZARI.
The Office’s Public Corruption Unit is overseeing the case. Assistant United States Attorneys Martin S. Bell and Andrea M. Griswold are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.