World Trade Center contractor convicted in $1B minority-owned business fraud scheme

By Kim Slowey
August 12, 2016

Dive Brief:

  • A Manhattan federal jury has convicted Canadian contractor DCM Erectors and its owner Larry Davis for minority- and woman-owned business fraud during the execution of almost $1 billion of steel work at the Freedom Tower and World Trade Center Transportation Hub projects, according to Reuters.
  • Prosecutors alleged that DCM and Davis enlisted two minority firms to be administrative fronts on the projects while DCM, trying to avoid paying tens of millions of dollars to minority firms, did all the work itself.
  • Davis’ lawyer said the company and Davis will appeal the verdict and that the minority firms did the work they were supposed to do on the two projects. One of the contractors, however, testified that DCM and Davis paid him $2 million to do “basically nothing,” according to The Real Deal. Davis’ sentencing is expected in November.
Dive Insight:

When Davis was first arrested in 2014, he told prosecutors that he would plead guilty but changed his mind and said he did not intentionally break the law while under contract with the Port Authority of New York and New Jersey, according to Reuters. However, prosecutors claimed that Davis falsified records to make it appear that minority contractors were performing work.