Federal prosecutors in Brooklyn found Tishman Construction Group guilty of $5 million in overbilling fraud between 1999 and 2009. As a result, Tishman will pay $20.2 million in victim restitution and federal penalties.
Over the course of ten years, Tishman added unworked or unnecessary overtime hours to its laborers' time sheets and also billed clients for days laborers were either out sick or on vacation. They also were found guilty of charging clients' more money than they had originally negotiated.
This follows a slew of similar cases. In 2012, Lend Lease Construction paid $56 million in fines and restitution for a 10-year overbilling scheme and Hunter Roberts Construction Group recently paid $7 million to resolve an investigation in its own billing practices.
Kim Slowey, a writer for Construction Dive, notes the 2015 Kroll Global Fraud Report found 75% of construction, engineering and infrastructure companies have experienced a fraud incident in the past year.
Construction fraud is so prevalent New York City — a trend some officials say is the result of a recent building boom — that the city established a construction fraud task force in August, made up of five city agencies, to investigate all levels of criminal behavior and unsafe practices in the construction industry.