ConEd Kickback Case Lands in Civil Court

MANHATTAN (CN) - Con Edison filed civil charges against a former employee who was criminally charged in an alleged $4 million corruption scheme.

Federal authorities arrested Con Ed's former section manager, Sassine Razzouk, on Jan. 23, 2011.

Roughly 2 years before his arrest, 10 other supervisors at the energy company were rounded up and accused of taking more than $1 million in kickbacks in exchange for approving inflated invoices, the Justice Department said at the time.

Now the National Union Fire Insurance Co. of Pittsburgh, as subrogee of Consolidated Edison, sued Razzouk, three other members of his family, a company he owned and the contractor that allegedly lined his pockets, in New York County Supreme Court.

"As a section manager, Razzouk oversaw various projects within Con Ed's electrical generating plants and substations involving the creation of plans and designs for new electrical control systems as well as drafting new diagrams to maintain existing systems," the Justice Department said in a Jan. 25, 2011 statement about the criminal case. "In supervising these projects, Razzouk managed and developed their scopes, prepared the requests for bids, reviewed the submitted bid proposals, awarded the contracts, and subsequently reviewed and authorized the payments to contractors under the contracts."

Razzouk allegedly began receiving tens of thousands to hundreds of thousands of dollars a month from a contractor, civil defendant Rudell & Associates, in 2008.

At first, the payments allegedly went directly from the contractor's account to defendant MDM Capital, a company controlled by Razzouk. That company financed Razzouk's personal expenses, including two Mercedes Benzes, property taxes for his second home, his income tax payments, $230,000 in mortgage payments, and $2.7 million that was transferred into a second account, according to the Justice Department statement.

Razzouk also allegedly doled out money to his wife, Grace, and daughters, Danielle and Monique. All three are named as defendants in the civil complaint.

National Union Fire Insurance says it reimbursed Con Ed for the losses.

Now it wants the defendants to cough up more than $6 million for breach of fiduciary duty, unjust enrichment and fraud.

It is represented by Ryan Sestack with Gordon & Rees.

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