Tishman Construction Admits Cheating Trade Center Clients

  • Decade-long scheme included Plaza Hotel, World Trade Center
  • Company agreed to pay $20 million and institute reforms

Tishman Construction Corp., builder of One World Trade Center in New York’s financial district, admitted to an overbilling scheme spanning a decade and agreed to pay $20 million in restitution and penalties.

The scam included the World Trade Center project, the renovation of the landmark Plaza Hotel on 5th Avenue and the expansion of the Javits Convention Center in Manhattan, the U.S. Attorney’s Office in Brooklyn, New York, said Thursday.

The mail and wire fraud conspiracy included improperly billing clients more than $5 million over a decade for hours the company never worked, and at rates exceeding those allowed in their contract, according to the statement.

Tishman entered into a deferred prosecution agreement under which it admitted to fraudulently overbilling clients, the U.S. said. The company also agreed to institute “far-reaching corporate reforms” to avoid future problems, prosecutors said.

In 2009 when the conduct was reported in the press, Tishman recognized deficiencies in its policies and instituted enhanced protocols and safeguards, John Gallagher, a spokesman for the company, said in an e-mail. The funds referred to in Thursday’s announcement went to union foremen and weren’t kept by Tishman, he said.

“Our commitment to integrity and safety on every project we are engaged on is this company’s highest priority,” Gallagher said.

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