Two fire alarm repair contractors have pleaded guilty to wire fraud conspiracy in connection with a multi-million dollar scheme targeting New York City agencies.
According to the US Department of Justice, Walter Stanzione and William Neogra admitted in federal court in Brooklyn to overbilling multiple agencies over an 11-year period through fabricated invoices and inflated pricing.
The hearing was held before United States Magistrate Judge Joseph A. Marutollo.
When sentenced, each defendant could face up to 20 years in prison.
The defendants controlled Fire Alarm Electrical Corp., which held contracts with city departments to maintain fire alarm systems.
They used shell companies secretly owned by Stanzione to submit invoices that marked up the real cost of supplies by up to five times.
The scheme also involved using entities tied to a previously convicted fraud defendant and altering invoices from legitimate businesses to mislead auditors.
DOJ records state that these methods allowed the pair to defraud the city out of millions over more than a decade.
The fraud affected several agencies including the Department of Citywide Administrative Services, the Department of Education, the Department of Environmental Protection, and the Department of Sanitation.
New York City Department of Investigation Commissioner Jocelyn Strauber said: “These defendants systematically inflated costs billed to multiple City agencies… When vendors exploit their contractual relationship with the City by overbilling, they steal public funds from City taxpayers.”
IRS-CI New York Special Agent in Charge Harry T. Chavis, Jr. stated: “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.”
United States Attorney John J. Durham said: “The defendants abused this position of trust so that they could scheme and steal, defrauding New York City out of millions of dollars.”
FBI Acting Assistant Director in Charge Leslie R. Backschies added: “Millions of dollars went up in smoke… The FBI remains determined to protect our city’s citizens and infrastructure from criminals seeking to unlawfully profit.”
The government’s prosecution is being handled by the Public Integrity Section of the United States Attorney’s Office for the Eastern District of New York.
Assistant United States Attorneys Erik Paulsen, Michael Gibaldi and Eric Silverberg are leading the case, supported by Paralegal Specialist Kavya Kannan.
Walter Stanzione and William Neogra pleaded guilty to wire fraud conspiracy for defrauding New York City agencies through Fire Alarm Electrical Corp.
They used shell companies to inflate the cost of fire alarm supplies by three to five times the real price.
Invoices were falsified and passed to multiple city departments including sanitation, education, and administrative services.
The fraud continued for more than 11 years and involved millions of dollars in overcharges.
Federal authorities stated that the scheme eroded public trust and misused taxpayer funds.
Each defendant faces up to 20 years in prison.
The investigation was led by the FBI, IRS Criminal Investigation, and the New York City Department of Investigation.
The case is being prosecuted by the US Attorney’s Office for the Eastern District of New York.
