News from
Vance prosecutor misconduct accusations could cost millions
BY GREG B. SMITH
THE CITY
Over the last two years, several
engineering firms signed deals
with Manhattan District Attorney
Cy Vance Jr. to pay nearly $7 million
after their executives were charged
in a wide-ranging construction bribery
scheme.
Now all of those forfeiture agreements
are up in the air as Vance examines allegations
that the prosecutor leading those
cases deliberately withheld evidence
favorable to the defendants, THE CITY
has learned.
The revisiting of the big-money deals
marks the latest development in the ongoing
prosecutorial misconduct inquiry
into outgoing Assistant District Attorney
Diana Florence, until recently one of
Vance’s top deputies.
Florence resigned last month and was
replaced as the head of Vance’s Construction
Fraud Task Force after the allegations
surfaced. She was the lead prosecutor
in the multi-defendant construction
bribery case, bringing criminal charges
against four firms and their executives,
and seeking a nonprosecution deal with
a fifth firm.
Vance is now reviewing all of the
cases — and “the civil forfeiture resolutions
are part of the pending review,” his
spokesperson, Emily Tuttle, confirmed to
THE CITY.
All of that forfeiture money ends up
with the law enforcement agencies that
brought the case, including the Manhattan
DA’s Office.
Over the last several years, Vance has
accumulated tens of millions of dollars
in forfeiture funds — far more than any
other DA in the city — via settlements
with various corporate entities, including
several big banks charged with fraud.
According to the latest available disclosure
forms, Vance reported having
$222 million in forfeiture money as of
June 30, 2018. He distributed some to
other law enforcement agencies, and
spent some on training, investigations
and pricey travel.
A ‘Personal Swamp’
The bribery cases that would generate
more millions for the DA’s forfeiture
account were announced by Vance at a
news conference in April 2018 with Florence
at his side.
Indictments alleged four firms illegally
obtained millions of dollars in
government water system contracts by
bribing a mid-level city bureaucrat for
confidential information during the bidding
process.
Vance portrayed the companies as
benefitting handsomely by engaging in
under-the-table payouts, asserting that “a
handful of industry players transformed
our city’s water infrastructure procurement
process into their own personal
swamp.”
Diana Florence walks out of a Manhattan
court after a case she was prosecuting
was dismissed, Jan. 5, 2020. Photo:
Ben Fractenberg/THE CITY
All told, Vance and Florence said the
tainted contracts totalled $177,609,293
over 10 years. Vance’s Asset Forfeiture
Unit then filed civil lawsuits against the
firms, demanding that they repay the full
value of all the contracts. They called this
money the “proceeds of crime.”
The amounts were enormous.
HAKS Engineers, Architects and
Land Surveyors, for instance, had won
five contracts worth $71.4 million.
D&B Engineers & Architects notched
11 contracts worth $73 million. Haider
Engineering secured two contracts worth
$12.8 million.
Simco Engineering, not a minorityowned
firm, engaged in a scheme to win
28 subcontracts worth $11.7 million
posing as a minority-owned firm, prosecutors
charged.
PHOTO: ROSE M. MCDOWELL/MANHATTAN DISTRICT ATTORNEY’S OFFICE
Soon all four firms were trying to
negotiate lower payments, agreeing to
hire “integrity monitors” to oversee their
procurement practices going forward.
They each signed off on deferred prosecution
agreements that would result in
all charges erased after three years, in exchange
for various forfeiture payments.
HAKS, now called Atane Consulting,
agreed to pay $3 million after two of
its executives pleaded guilty to bribery
charges. D&B agreed to pay $1.8 million
even before its president was found guilty
of bribery in a nonjury trial. Simco and
Haider agreed to pay $1 million each after
their owners pleaded guilty to bribery
charges.
D&B and Haider have already turned
over a total of $2.1 million. Haks and
Simco were scheduled to begin paying
in the coming months.
Firms Looking for Reliefs
Now all four are in talks with the DA
about whether the prosecutorial misconduct
allegations negate the deals. In
the end, the money could wind up being
sent back to the firms that already have
written the checks, with the rest of the
agreed-upon payments cancelled.
John Martin, an attorney for Simco,
said Vance’s internal investigation will
ultimately determine how much — if
anything — the firm will have to pay.
“It’s going to depend on how they
deal with each individual,” he said. “The
company is hopeful. Whether they get
released from it or not, they’re hoping
for some relief.”
Anthony Capozollo, attorney for D&B
Engineers, which the DA’s office said
has to date paid $1.1 million of the $1.8
million in forfeiture it owes, said only,
“We’re talking with the DA about whatever
implications the public revelations
have for our client.”
Michael Scotto, an attorney for Haks,
would not discuss how the misconduct
investigation might affect the firm’s deal
to pay $3 million in forfeiture, except to
say “we’re in a dialogue with the DA’s
office.”
A fifth firm, the Kansas-based Black &
Veatch, worked with the DA to hammer
out a nonprosecution agreement after one
of its vice presidents was charged with
bribery. Charges against that executive,
Kyriacos Pierides, were dismissed by a
judge last month due to the misconduct
accusations.
On Tuesday, Andrew Lankler, an
attorney for Black & Veatch, declined
to discuss details of the arrangement,
including any forfeiture payments.
This story was originally published
on Feb. 19, 2020, by THE CITY, an
independent, nonprofit news organization
dedicated to hard-hitting reporting
that serves the people of New York.
Schneps Media February 20, 2020 13