CityTime Consultants Charged With Stealing $80 Million
Gothamist | December 16, 2010
Back in 2007, the city thought it could save $60 million by installing biometric scanners to keep track of employees' time (CityTime, they called it). But years later the city has spent $722 million extra because the project is, well, a huge mess of bloated salaries to consultants and overruns ("an endless money pit," Comptroller John Liu called it). And now an already embarrassing situation has gotten distinctly worse. Four consultants hired to run quality assurance have been accused of taking $80 million in "an elaborate fraud and kickback scheme" that involved faked time sheets (ha!) and a series of shell companies. According to the suit the suspected ringleader even got his mom and his wife in on the scheme!
Prosecutors say the scam was the brainchild of Mark Mazer, a consultant hired to oversee quality assurance on the project. Instead he just assured his own quality of living, taking in nearly $25 million in kickbacks by moving existing city contracts through a series of shell companies from which he would siphon what he could. Along with Mazer the city is charging his colleague Scott Berger and two business associates whom he steered money towards (and who submitted false time sheets). Mazer's wife, Svetlana, and mother, Larisa Medzon, were also arrested and charged with money laundering.
The charges are a black eye to the Bloomberg administration and call into question how much control they have had (or haven't) over the project. Just last year the Office of Payroll Administration's executive director Joel Bondy told a City Council hearing that Mazer and Berger “have proven themselves in the past and currently to be highly capable and competent at their jobs...The reasons why they are working in these positions is because of that competency.” Did we mention that Bondy, before he took his current job, used to work for Spherion, the company that Mazer and Berger worked for?
Mayor Bloomberg, for his part, pointed to the arrests as a good sign arguing that they show that the city has "zero tolerance for any waste" and added “the issue is that here we had somebody that we trusted, or one of our contractors trusted, and that trust was misplaced. And we just have no tolerance for this whatsoever. And you can rest assured we can do everything possible to ensure that we get that money back and that the perpetrators are prosecuted to the fullest extent of the law."
Other politicians, meanwhile, are having a field day. City Councilman Letitia James (D-Brooklyn), a critic of the program, told the Post "I am shocked. Eighty million just disappeared and no one from the administration raised a question." And Liu held an emergency session of the payroll administration board of directors saying “These charges will be another stain on the checkered history of the CityTime project.”
And in case you were wondering, CityTime is currently only used by 35% percent of city employees.
Gothamist | January 5, 2011
The Daily News continues to beat the drum of the relatively complex CityTime scandal currently bothering the Bloomberg administration. The latest development? Investigators are now looking at the main contractor for the project, Virginia-based Science Applications International Corp. (SAIC), one of the biggest defense contractors around.
SAIC has not been charged with any wrongdoing, but investigators are trying to figure out how it managed to not notice that its subcontractors were stealing money out from under them. Which seems a perfectly reasonable thing to try and figure out to us.
Meanwhile, reporter Juan Gonzalez uses his story to review a whole slew of still unanswered questions about the situation. For instance, why did Joel Bondy let alleged ringleader Mark Mazer essentially run the project for years? And why did Bondy's old business partner get paid nearly $3 million in consulting fees over five years–including over 700 hours of overtime? We can't wait to find out.