Scaffolding scammers facing jail time and ordered to pay $1.5 million in restitution for tax and loan fraud
ALBANY — A trio of crooked scaffolding contractors are facing jail time and must pay $1.5 million in restitution after being convicted of felony tax and loan fraud, Attorney General Letitia James announced Tuesday.
The scaffolding scammers, Kenneth Martinez, 51, Shai Sellam, 45, both of Long Island, and Hayim Jacob Barkol, 39, of Brooklyn, falsified loan statements to banks, submitted fake invoices and laundering roughly $3 million in ill-gotten gains by pretending to sell scaffolding and hoisting equipment to one another’s companies, according to court documents.
"We are all committed to uncovering and prosecuting businesses that have defrauded the state and numerous financial institutions out of millions,” James said. “These fraudsters must now must pay back stolen funds and cease their illegal operations. Let this be a lesson to every individual and company that we will never stop fighting against those who aim to defraud New Yorkers.”
Martinez’s company, Metropolitan Enterprises, was one of the largest scaffolding companies in the state and a subcontractor for work done on the George Washington Bridge and on the Oculus Project at the World Trade Center Transportation Hub.
As part of their scheme, the trio would submit fake invoices and a bogus deposit check for equipment that either didn’t exist or was already owned by Metropolitan. The money was then used to pay other debts or union dues, according to James.
The three-year-long investigation into the fraud, which involved the Port Authority of New York and New Jersey, the New York State Department of Taxation and Finance and the New York City School Construction Authority, was dubbed “Operation Skyfall.”
Earlier this month, the three men and their companies pleaded guilty to a variety of money laundering and fraud charges and ordered to pay $1.5 million in restitution.
Martinez, due to be sentenced for money laundering in October, is already looking at three to nine years behind bars for tax fraud.
Sellam faces up to two to six years in prison when sentenced next year, while Barkol is expected be given five years of probation.