MANHATTAN (CN) – Federal prosecutors accuse four consultants to the New York City Office of Payroll Administration of stealing more than $80 million from an information technology project called “CityTime.” CityTime was supposed to help the city prevent payroll waste, fraud and abuse.
Mark Mazer, Dmitry Aronshtein, Victor Natanzon and Scott Berger were arrested Wednesday.
Prosecutors say the men laundered the money through a network of shell corporations. Mazer’s wife, Svetlana Mazer, and his mother, Larisa Medzon, are accused of participating in the conspiracy.
Mazer is accused of masterminding the conspiracy. He “used front companies controlled by his wife and mother to personally pocket more than $25 million in city money,” the U.S. Attorney’s Office said in announcing the arrests.
Showing that even Uncle Sam understands irony, sort of, the U.S. Attorney’s Office added: “In an ironic twist, funding for CityTime, a project intended to prevent payroll waste, fraud, and abuse, was itself allegedly bilked in part by fraudulent timekeeping.”
According to the U.S. Attorney:
Mazer and his wife bought two homes with more than $3 million of their ill-gotten gains, bought six cars in the past two years, and put more than $1 million into bank accounts.
Aronshtein “obtained over $55 million in city money for his corporation, which previously had no apparent clients.” He banked more than $1 million for himself, took out $425,000 in cash and ATM withdrawals, and sent more than $500,000 to other corporations owned by him or his wife. He limited himself to two new cars in the past 2 years.
Natanzon got more than $20 million for his corporation, and helped himself to more than $400,000 of it.
Berger got more than $1.4 million from Mazer’s and Aronshtein’s firms, and Medzon more than $2 million.
Charges include wire fraud, conspiracy and money laundering, all of which are punishable by 20 years in prison and fines.