Metro Tech

City Contractor Fined $500 M. for CityTime Kickback Scheme

Can half a bil undo one of the biggest scams since Tammany Hall?
bloomberg City Contractor Fined $500 M. for CityTime Kickback Scheme

Mayor Bloomberg. (flickr.com/americanprogress)

It’s been a disaster from the get-go, but finally New York City is due to make back some of the millions of dollars it casually tossed into the black hole that is CityTime. The Science Applications International Corporation entered into an agreement with the Manhattan U.S. Attorney’s office today to pay $500,392,977 in restitution to the Department of Justice for fraud committed during a contract with the infamous CityTime Project. The agreement resolves a dispute between SAIC and the city for the fraud perpetrated with CityTime, the digital timekeeping and payroll system implemented to streamline the payment process to city workers. SAIC was the main contractor for the CityTime project.

As the Wall Street Journal reported in December 2010, “Federal prosecutors alleged Mark Mazer, a consultant on the CityTime automated timekeeping project, steered more than $76 million in city funds to two consulting firms, including one believed to be run by a relative. The firms then secretly kicked back more than $24.5 million to Mr. Mazer, who was being paid more than $4.4 million for his work, authorities say.”

Following the incident, former SAIC Project Manager Gerard Denault was arrested in May 2011 for taking more than $5 million in illegal kickbacks.

CityTime has been a blight on Mayor Bloomberg’s administration since large-scale fraud was uncovered in December 2010. Mayor Bloomberg has taken major flack for allowing millions of dollars to “slip through the cracks” on a crappy project that already went millions of dollars over budget. For a Mayor who claims to be so tech savvy and business oriented, the well-intentioned project has certainly not done him any favors.

The Deferred Prosecution Agreement was approved in Manhattan federal court today, according to a New York state press release. SAIC will be responsible for paying the $500 million, as well as forgiving $40 million the city still owes them for CityTime. In June 2011, Mayor Bloomberg had asked for $600 million back from SAIC, an amount just over what the U.S. Attorney nabbed.

“Today’s settlement is a major victory for taxpayers, and just as importantly, it is a major a victory for justice and public integrity,” said Mayor Bloomberg in a press release.

Miguel Bloombito, the Mayor’s Spanish-speaking alter ego, did not address the deal on his Twitter, instead choosing to tweet about Pi Day¡Qué pena!

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