Indian-origin man pleads guilty to fraud in connection with New York subway repairs

New York: An Indian-origin public transportation employee here has pleaded guilty to obstructing a federal investigation into bid rigging and fraud in connection with contracts awarded by the city's transportation authority for subway repairs in the aftermath of Superstorm Sandy.

Paresh Patel, 59 of New Jersey, a former manager at the Metropolitan Transportation Authority (MTA) has surrendered to federal authorities in February.

He pleaded guilty to one count of obstruction of justice, which carries a maximum sentence of 20 years in prison, United States Attorney for the Southern District of New York Geoffrey Berman said.

According to allegations made in the Information as well as Patel's admissions in court, in order to manage necessary subway rehabilitation work following Superstorm Sandy in 2013, the MTA awarded construction management contracts for managers to oversee post-Sandy subway projects.

With a view to prevent self-dealing and the appearance of corruption, the MTA maintains rules that required that MTA employees are barred from participating in the selection, award, or administration of a contract if the employee, his or her family member, or an organisation that employs the employee or one of the employee's family members has a financial interest in any of the companies that propose or bid on, or are awarded, such a contract.

Patel was a programme manager at the MTA and was responsible for awarding contracts and exercising oversight of Superstorm Sandy-related subway repairs. In June 2014, he and another MTA employee set up an engineering consulting firm named 'Satkirti Consulting Engineering'.

Since MTA rules prohibited them from having an interest in such a company, Patel and the other employee registered Satkirti in the names of their children, and then transferred the ownership to a friend of Patel who played no substantive role in the management of Satkirti.

In February 2015, Satkirti was awarded a contract as a subcontractor on the Joralemon Tube subway rehabilitation project, which project Patel would oversee in his role at the MTA.

Although the technical employees of Satkirti who sought and carried out the subcontract were Patel's friend, who had no background or qualifications in engineering, and a second individual who Patel recruited from a pizzeria owned by Patel, he directed the operations of Satkirti and its employees while concealing his involvement with the company. Among other things, Patel created a company email account for Satkirti, and instructed Satkirti's employees about what to write in emails.

In the spring of 2016, federal officials launched an investigation into the contract that was awarded to Satkirti. They served subpoenas and conducted interviews with individuals involved in Satkirti, many of whom made false statements about their and Patel's involvement in the company.

Patel took numerous steps when he learnt that his conduct was being investigated, including deleting an email account, asking others to destroy evidence, and encouraging others to lie to authorities to obstruct the investigation. Over the course of the federal investigation, at the request of Patel, several individuals questioned by investigators also concealed and lied about his involvement in Satkirti.

"In the wake of Superstorm Sandy, Paresh Patel set up a company so that he and his family could profit from the work that was being done to repair our subways. When Patel learned he was under investigation, he destroyed evidence and asked others to lie to federal and local investigators. Efforts to obstruct investigations into corruption at the MTA undermine the public's faith in the nation's largest public transportation system and threaten the ability of our Government to ensure that justice is done, Berman said.

PTI