11-19-01
Brothers Plead Guilty in Mob Payoffs for Construction Businesses.

By ELISSA GOOTMAN


CENTRAL ISLIP, N.Y., Nov. 14 A pair of brothers prominent in the construction industry pleaded guilty today to charges that they paid off organized crime figures in exchange for labor peace.

The brothers, Joseph and Fred Scalamandre, operate several Long Island construction companies and have worked on a number of publicly financed projects. They pleaded guilty to two counts of conspiracy before Judge Jacob Mishler of Federal District Court here and were released on $100,000 bonds.

Between 1991 and 1998, the Scalamandres conspired to pay members of the Luchese organized crime family about $40,000 a year to influence construction trade unions, according to the indictment.

In addition, the Scalamandres were charged with tax evasion. The authorities said the brothers directed their subcontractors to create nearly $1 million worth of false invoices. The subcontractors were paid with company checks, which they converted to cash they returned to the Scalamandres. The invoices were charged to public and private contracts, prosecutors said, and the cash they generated was not reported on federal income tax returns.

As part of their plea agreement, the Scalamandre brothers agreed to pay the federal government $5 million in restitution.

They face up to 10 years in prison and are scheduled for sentencing on Jan. 18.

The Scalamandres' lawyers issued a statement saying the Scalamandres had made payments to mob figures only under duress. The brothers "dreaded having to make the payments and did so unwillingly over a several year period," the statement said. "The tax charge simply reflects the way in which Joe and Fred generated the cash needed to make these payments."

Also today, prosecutors announced guilty pleas entered by two subcontractors who acknowledged they had acted as fronts for the Scalamandres on contracts governed by the Minority Business Enterprise Program.

"The Scalamandres defrauded government agencies, evaded taxes, paid off organized crime leaders for `labor peace' and perverted a worthy minority-business program, all for their own selfish ends," Alan Vinegrad, the United States attorney in Brooklyn, said in a statement.