An 18-month investigation into construction work carried out at the Bloomberg financial services headquarters in New York has resulted the arraignment of 14 individuals, including three of the company’s own executives and two former managers of contractor Turner Construction, the American subsidiary of Spanish giant ACS.
All of the defendants pleaded not guilty at a hearing yesterday, 11 December. More than a dozen individuals, including one other former Bloomberg employee, have already entered guilty pleas and paid about $5.5m in restitution.
The case against the defendants was laid out by Christopher Beard, Manhattan assistant district attorney. He focused on Bloomberg’s former global head of construction, Anthony Guzzone, whom he described as "the capstone in the pyramid of corruption", and a man who "orchestrated almost this entire scheme to steal from his employer at every and any opportunity that presented itself".
Mr Guzzone, who was recruited by Bloomberg from a construction company more than 15 years ago, was fired in October 2017. He is now charged with conspiracy, grand larceny, money laundering and commercial bribery.
Prosecutors allege that he handed out contracts for fit-out work at the company’s headquarters at 731 Lexington Avenue in Manhattan to certain subcontractors in return for kickbacks. They further allege that the value of the works was inflated to ensure that all parties made a profit, resulting in a loss of tens of millions of dollars to the client.
As well as doing business with external companies, prosecutors say Guzzone and others created an electrical contractor, for which he was a sleeping partner, which won $240m of work.
Beard added that Guzzone had "built himself a palace out there in New Jersey – all of it with money stolen from Bloomberg."
According to the New York Post, Guzzone’s home includes "matching statues of elephants rearing up on their hind legs flank the steps to the front door" as well as "pool, covered patio, gazebo, wishing well and an array of backyard solar panels – as well as a playhouse that’s a miniature replica of the lavish residence"
Alex Spiro, Mr Guzzone’s defence lawyer, called the allegations against the former executive "one-part fairy tale and one-part a misguided attempt to turn a professional courtesy into a federal case".
Guzzone was released on a $1m bond.
Investigators have also seized records at Turner Construction offices downtown. The company said that two executives in the interior construction division – Ronald Olson and Vito Negro – had "gone rogue". They were fired by Turner in October 2017.
The New York Times reports Tom Curran, a lawyer for Turner Construction, as saying his company and Bloomberg aided the district attorney’s investigation from the start. Neither company is being charged with anything or fined.
Javier Paulino, a former Bloomberg manager, pleaded guilty in July to taking bribes and stealing more than $1m by overcharging for work done at Bloomberg offices, or charging the company for work that was never done.
He has been cooperating with the authorities, as has Frank Zustovich, 42, who worked at Jonathan Metal & Glass, a supplier to Bloomberg. Zustovich pleaded guilty to stealing more than $50,000 from Bloomberg.
Image: Bloomberg’s New York City offices (Bloomberg)