An Irish brother and sister who run one of New York’s largest building firms have been charged with scheming to cheat union benefit funds out of contributions.
Documents filed in a federal court in Brooklyn show that Donal O’Sullivan, the founder and president of Navillus, his sister Helen O’Sullivan, the company’s treasurer, and Padraig Naughton, its financial controller, have been charged with wire fraud, mail fraud, embezzlement from employee benefit funds, submission of false remittance reports to union benefit funds and conspiracy to commit those crimes.
They were arrested last week and arraigned before United States Magistrate Judge Robert M Levy. Mr O’Sullivan was released on a $500,000 bond. Ms O’Sullivan and Mr Naughton were each released on $250,000 bonds.
Navillus is one of the biggest building firms in New York. It is involved in several major projects in Manhattan, including the 9/11 Memorial & Museum, and One Vanderbilt.
Mr O’Sullivan, who is originally from Kerry, is a passive investor with his brother, Kevin O’Sullivan, in the Port of Cork harbour commissioners site in Cork City.
Kevin O’Sullivan, through his firm, Tower Holdings, is planning to build Ireland’s tallest building on the site. He is also building the Prism building nearby.
The arrests and indictment follow a lengthy investigation involving the FBI, the US Department of Labor, Homeland Security and the Port Authority of New York and New Jersey.
Navillus was required to periodically file remittance reports with the benefits funds that detailed the number of hours worked by each worker.
It is alleged the defendants engaged in a payroll scheme from approximately 2011 to 2017 to avoid making those contributions by using a consulting firm to pay certain Navillus workers for work done on Navillus construction jobs.
It is alleged that neither Navillus nor the consulting firm made contributions to the benefits funds on behalf of those workers.
It is alleged that in an effort to disguise the scheme, the defendants directed the consulting firm to issue fraudulent invoices to conceal the fact that funds paid by Navillus to the consulting firm were, in fact, for wages paid to Navillus workers.
It is understood that sums of up to €7.2m were paid out in an effort to avoid making over $1m in required contributions to union benefits funds.
Following the arrest and charges, Mr O'Sullivan and his co-accused are temporarily stepping aside from their roles. In a letter to clients, he said they had no choice but to commit themselves to clearing their names.
He said while his company has “worked hard over the past three decades to build strong relationships with the vast majority of New York unions,” there are “a select few who seem determined to tear apart the Navillus family.”