Updated 06/20/2011 11:05 PM
U.S. Attorney: CityTime Project "Corrupted To Its Core"
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More people were charged with fraud Monday in connection with the scandal involving CityTime, the city's computerized payroll system.
U.S. Attorney Preet Bharara and the city Department of Investigation revealed that more than $600 million in the CityTime project was tainted with fraud.
Previously, prosecutors said the fraud had only involved $85 million.
On Monday, the authorities revealed indictments against TechnoDyne, a subcontractor based in Wayne, N.J., and Padma and Reddy Allen, two top executives in the company.
Authorities believe the Allens have fled to India, and they are working to get the suspects back to the United States.
"This scheme to overbill the city appears to have been systemic. Its reach extended across virtually every level of the CityTime project, allegedly involving over $600 million in city funds, more than $40 million in kickbacks and an international network of shell companies and accounts created for the sole purpose of laundering criminal cash," said Bharara. "In short, today we allege what many have long feared. The CityTime project was corrupt to the core by one of the most largest and brazen frauds ever committed against the City of New York."
The new developments are a blow to Mayor Michael Bloomberg, who billed himself as a top-notch manager for the city. The new charges raise questions of fraud occurring on Bloomberg's watch and the mayor's oversight of outside contractors.
City Comptroller John Liu said in a statement, “Today’s announcement unfortunately sheds more light on just how flawed the management of the CityTime project was. According to the indictment ‘virtually the entirety of the more than $600 million that was paid to SAIC was tainted directly or indirectly, by fraud.’ New Yorker’s can hope that this will eventually lead to restitution for the hundreds of millions of dollars paid on an out-of-control project, years overdue and, ten-fold over budget.”
The U.S. attorney said the investigation is ongoing. A total of 11 people have now been charged in connection to the scandal.
Meanwhile, a spokesman for Mayor Bloomberg said the city will be using all available avenues to recover any funding it is owed.