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CityTime Firm Agrees To Pay Back Millions Under New Deal

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Federal investigators announced Wednesday they have reached a deal with the primary firm involved in the city's automated pay roll system scandal.

The U.S. Attorney's office says Science Applications International Corporation has agreed to pay $370 million in restitution and a $170 million penalty.

Prosecutors had charged contractors with embezzling $80 million from the city, as the project, which started under former Mayor Rudolph Giuliani's administration, ended up years late and hundreds of millions of dollars over budget.

According to U.S. Attorney Preet Bharara, the $700 million project was "the single-largest fraud ever perpetrated against the city of New York."

By agreeing to pay the money and adopt a series of reforms, SAIC will have criminal charges deferred, and dropped altogether if the company makes good on its commitments in the next three years.

"The investigation revealed that SAIC managers responsible for CityTime placed profit ahead of principal time and time again," Bharara said.

"It is a major victory for justice and public integrity," Mayor Michael Bloomberg added. "Our administration has zero tolerance for corruption. We have set the highest standards for city employees and contractors and we expect every single person to abide by them."

SAIC was the primary firm involved in the CityTime project, an automated payroll system featuring hand scanners and computer software that was supposed to save the city money, eliminating payroll waste and abuse.

In a message to the company's 41,000 employees, SAIC CEO John Jumper said, "This settlement allows us to conclude the CityTime matter and move forward as a better, stronger company dedicated to the highest standards of ethics and customer performance."

The CityTime scandal was a source of embarrassment for the mayor, who was a savvy businessman before running for office.

Asked if the city should have caught the fraud sooner, Bloomberg said Wednesday, "We're not going to tolerate any corruption and we'll go after all of it. Hopefully we prevent it, but if we don't prevent it, we'll make sure we catch it and get restitution."

Missing from the announcement was City Comptroller John Liu, a vocal critic of the the project's ballooning bill.

Liu's 2013 campaign is the subject of a federal investigation by the U.S. attorney. When asked if he got an invitation, Liu replied, "We were not invited, but since last week we have been working with the U.S. attorney's office."

The CityTime investigation is ongoing, as there are still eight criminal cases pending and two of those defendants are fugitives.

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