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Economist Among Clients Allegedly Bilked by City Construction Company: DA

Wednesday, May 04, 2011

A major New York City construction company is charged with defrauding its clients — including The Economist magazine — out of more than $30 million over the past decade.

Lehr Construction and four of its executives have been indicted on racketeering and other state charges, Manhattan District Attorney Cyrus Vance Jr. announced on Wednesday.

"Lehr's criminal scheme was very basic," Vance said. "Employees inflated and over-invoiced the costs on construction management projects by colluding with their subcontractors, time after time, job after job, year after year."

Lehr, which oversees interior renovations, would recover the money that clients paid to subcontractors by having those same subcontractors perform work for the company at reduced rates, according to Vance. Victims included Fidelity Investments and the publisher of the Economist.

The District Attorney says the indictment is part of an on ongoing effort to root out the fraud that he said drives up costs in New York's construction industry.

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