Earlier today in Brooklyn federal court, Walter Stanzione and William Neogra, the principals of a fire alarm maintenance company, admitted to their involvement in a wire fraud conspiracy. The charges stem from a scheme lasting over ten years, during which they defrauded New York City by submitting millions of dollars in inflated fraudulent bills. The proceedings took place before United States Magistrate Judge Joseph A. Marutollo. Both defendants face potential sentences of up to 20 years in prison.
The announcement was made by John J. Durham, United States Attorney for the Eastern District of New York; Leslie R. Backschies, Acting Assistant Director in Charge at the FBI's New York Field Office; Jocelyn E. Strauber, Commissioner of the New York City Department of Investigation (DOI); and Harry T. Chavis Jr., Special Agent in Charge at IRS Criminal Investigation, New York.
“For over a decade, the City of New York relied on the defendants to ensure that the fire safety systems in hundreds of city buildings were in safe, working order,” stated United States Attorney Durham. “The defendants abused this position of trust so that they could scheme and steal, defrauding New York City out of millions of dollars. The guilty pleas announced today make clear that reprehensible conduct like this will be uncovered and prosecuted.”
“Millions of dollars went up in smoke as Walter Stanzione and William Neogra fraudulently inflated the cost of their company’s products to finance personal luxurious purchases,” stated Acting FBI Assistant Director in Charge Backschies. “For more than ten years, the defendants charged various New York City clients exaggerated pricing for fire alarm systems and obfuscated this misconduct through doctored invoices."
IRS-CI New York Special Agent in Charge Chavis added: “Stanzione and Neogra orchestrated a scheme to defraud the City of New York... Today’s plea means the defendants’ lifestyle will go from extravagant in size to a reduction in square feet.”
“These defendants systematically inflated costs billed to multiple City agencies—including the Department of Citywide Administrative Services, the Department of Education, the Department of Environmental Protection, and the Department of Sanitation," DOI Commissioner Strauber stated.
Court documents revealed that Stanzione and Neogra controlled Fire Alarm Electrical Corp., which had contracts with various NYC agencies for fire alarm system maintenance. They overbilled these agencies using fraudulent invoices with inflated prices through several methods:
- Creating shell companies secretly owned by Stanzione to re-invoice supplies at inflated prices.
- Using pre-existing shell companies involved in other frauds.
- Modifying legitimate retailers' documents when auditors became suspicious.
These actions allowed them to submit millions worth of fictitious payment requests over eleven years.
The case is being managed by Assistant United States Attorneys Erik Paulsen, Michael Gibaldi, Eric Silverberg with Paralegal Specialist Kavya Kannan assisting.
