ConDig (21-Sept-22). The United States Attorney for the Southern District of New York has charged five men in connection with a scheme by a Queens-based construction company to scam New York City out of millions of dollars.
The group allegedly obtained contracts to do maintenance work at city shelters, and then filed false claims.
Liaquat Cheema and Ali Cheema, who were the president and vice president, respectively, of AFL Construction Co. Inc. (AFL) in Queens, were arrested on charges of wire fraud conspiracy, aggravated identity theft and money laundering conspiracy.
Prosecutors said that AFL entered into public contracts with the city worth about $12 million to perform general contracting work at homeless shelters all over the city. The contracted work included maintenance, landscaping and snow removal.
But prosecutors reported that from 2014 through 2018, the Cheemas would submit false invoices to the city for work that was never done, or inflate the costs of materials for work they did complete. To date, prosecutors claim AFL was paid at least $8 million for fraudulent work.
“The defendants entered into public contracts so that they could provide vital maintenance to homeless shelters to aid New York City’s most vulnerable residents; however, instead of honoring these contracts, the defendants allegedly concocted multiple schemes to steal public funds,” said U.S. Attorney Damian Williams.
“Today’s arrests signal this Office’s continued commitment to combat any and all fraud and money laundering schemes.”
At the same time, Irfan Bajwa, Shouket Chudhary and Khizar Hayat allegedly used several bank accounts to obtain the money that was fraudulently secured and conducted financial transactions to hide the source of the money.
For example, certain of the defendants caused AFL to issue hundreds of checks to purported workers fraudulently listed in documentation submitted to the city in support of payment on the contracts but never delivered those checks to the purported workers; instead, the defendants deposited the checks into their own personal and business bank accounts, prosecutors said.
The men were each charged with one count of money laundering conspiracy.
In addition, prosecutors say that Bajwa and others scammed Medicaid out of tens of thousands of dollars by repeatedly submitting fraudulent certifications that under-reported their actual income.