Construction firm accused of $30 million fraud | Another NYC Builder Accused of Fraud

Lehr Construction Corp. and four of its executives were indicted on charges of defrauding construction management clients of at least $30 million over the past 10 years, Manhattan District Attorney Cyrus Vance announced Wednesday.

Lehr allegedly stole money from its Manhattan clients from 1998 to 2010 by secretly shifting costs from the firm’s general-contractor projects to its construction-management projects, according to the Manhattan D.A.’s announcement.

“This construction company was corrupt at all levels,” Mr. Vance said in a statement. “Its executives developed—and successfully executed—a scheme to steal millions of dollars from their clients. Simply put, they used an over-invoicing scheme to steal from their construction-management clients, and then used general contractor jobs to recover the stolen funds.”

A spokeswoman for Lehr would not comment beyond the following statement provided by the firm’s attorney, William Schwartz, of the law firm Cooley LLP: “Having recently sought the protection of the United States Bankruptcy Court, Lehr Construction is confident that it will complete all of its projects and be able to pay all of its creditors and subcontractors notwithstanding these charges.”

Lehr, a 32-year-old firm, filed for Chapter 11 bankruptcy in February, citing the tightening of the credit market and the overall decline in the real estate market having an adverse affect on its business.

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