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Bigwigs Charged With Public Contract Fraud

MANHATTAN (CN) - Federal prosecutors charged the top two officers of Environmental Energy Associates with conspiring to defraud government programs of millions of dollars. In a separate but related agreement, Skanska USA Civil Northeast agreed to pay $19.6 million to settle a complaint involving Environmental Energy Associates.

Balu Kamat and Carmine Desio defrauded the government to get contracts for businesses that were supposedly owned by "socially and economically disadvantaged individuals," prosecutors said. They won contracts from the Metropolitan Transit Authority, the Port Authority and other New York City agencies, then hired subcontractors to do it and took a cut and a markup.

Both men have been charged with conspiracy to commit mail fraud and wire fraud, and mail fraud. If convicted, they each face up to 40 years in prison.

In a separate agreement, the U.S. Attorney's Office said, Skanska USA Civil Northeast agreed to pay $19.6 million to settle a complaint. Skanska paid that much to Kamat's and Desio's company, EEA, for work in which EEA was a subcontractor, prosecutors said.

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