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Cyrus R. Vance, Jr.

District Attorney, New York County

For Immediate Release
April 05, 2017

DA VANCE: FOUR INDIVIDUALS AND THREE CORPORATIONS CHARGED WITH $9.6 MILLION CONSTRUCTION INDUSTRY FRAUD

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictments of three corporations and four individuals for collectively defrauding at least 40 subcontracting companies out of approximately $9.6 million by failing to pay the companies for work completed on 34 projects in Manhattan. The defendants are charged in New York State Supreme Court indictments with Grand Larceny and Scheme to Defraud, among other charges. [1]

“This type of fraud is harmful to the entire New York City construction industry,” said District Attorney Vance. “It forces the small businesses that complete multi-million dollar projects they do not get paid for to lay off employees or even declare bankruptcy. It also burdens the property owners with additional costs, and weakens the credibility of honest contracting companies. These indictments come less than a year after two other defendants were sentenced to state prison for similar conduct. Let these cases serve as a warning to any individual or corporation engaged in this type of fraudulent behavior – withholding payment from subcontractors is a crime and it will be prosecuted by my Office.”  

Artisan Construction

According to the indictment and statements made on the record in court, ARTISAN CONSTRUCTION (ARTISAN) was a mid-sized general contracting company specializing in interior construction and renovations of commercial and residential properties with offices located at 65 West 57th Street in Manhattan. ARTISAN was owned by JAMES GALVIN, 45, who also served as the president; GARRET BRANAGH, 44, was the company’s Chief Financial Officer. ARTISAN had 10 to 20 full-time employees but relied on subcontractors to perform the work on various construction projects. 

Between December 1, 2013 and January 25, 2017, the defendants defrauded at least 17 subcontracting companies – which were hired to perform work on nine ARTISAN projects in Manhattan – out of $2.9 million by failing to pay the subcontractors for completed work. The projects included: 1411 Broadway; 780 3rd Avenue; 250 West 57th Street; 350 5th Avenue; 727 7th Avenue; 65 East 55th Street; 5 Bryant Park; 717 5th Avenue; and 1095 Avenue of the Americas. In many instances, the subcontractors and property owners contacted GALVIN and BRANAGH and admissions were made by both of the defendants about the lack of payment. 

In addition to failing to pay subcontractors for their work, the defendants are also charged with forging documents and creating false business records in order to induce one of the property owners to continue making payments to the company. 

ARTISAN closed during the summer of 2016. 

McGovern & Company

According to the indictment and statements made on the record in court, MCGOVERN & COMPANY (MCGOVERN) was a mid-sized general contracting company specializing in interior construction and renovations of commercial and residential properties with offices located at 286 Madison Avenue in Manhattan. DANIEL MCGOVERN, 53, served as the company’s sole owner and president. The company had between 15 and 20 full-time employees, but relied on subcontractors to perform the work on various construction projects. 

Between November 14, 2013 and February 22, 2017, the defendant and his company defrauded at least 16 subcontracting companies – which were hired to perform work on 20 MCGOVERN projects in Manhattan – out of $5.7 million by failing to pay the subcontractors for completed work. The projects included: 10 East 53rd Street; 122 East 42nd Street; 885 3rd Avenue; and 292 Madison Avenue. In many instances, the subcontractors and property owners contacted DANIEL MCGOVERN and he made admissions about the lack of payment. 

MCGOVERN closed during the summer of 2016. 

IBEX Construction Company

According to the indictment and statements made on the record in court, IBEX Construction Company (IBEX) is a mid-sized general contracting company specializing in interior construction and renovations of commercial and residential properties with offices located on One Whitehall Street in Manhattan. ANDRAS FRANKL, 68, serves as the company’s sole owner and president. IBEX has between 20 and 30 full-time employees, but relies on subcontracts to perform the work on construction projects. 

Between January 2013 and March 2017, the defendant and his company defrauded at least eight subcontracting companies – which were hired to perform work on six IBEX projects in Manhattan – out of more than $1 million by failing to pay the subcontractors for completed work. The projects included: 27 West 44th Street; 204 East 43rd Street; 570 7th Avenue; and the “OCULUS” at the World Trade Center. In many instances, the subcontractors and property owners contacted FRANKL and he made admissions about the lack of payment.

Last year in a separate and unrelated case, ANTHONY and JAMIE ROTONDARO were sentenced to state prison for stealing funds from clients and subcontractors. 

Assistant District Attorney Christopher Beard, Senior Supervising Attorney, is handling the prosecution of the cases, under the supervision of Assistant District Attorney Judy Salwen, Principal Deputy Chief of the Rackets Bureau, Assistant District Attorney Michael Ohm, Deputy Chief of the Rackets Bureau, Assistant District Attorney Jodie Kane, Chief of the Rackets Bureau, and Executive Assistant District Attorney Michael Sachs, Chief of the Investigation Division. Principal Financial Investigator Michael Kelly and Trial Preparation Assistant Kyle Tramonte assisted with the investigation. 

District Attorney Vance thanked the New York State Police, specifically, Superintendent George P. Beach II and Major Robert C. Gregory, Detail Commander, Special Investigations Unit. 

[1] The charges contained in the indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.

Defendant Information:

ARTISAN CONSTRUCTION
New York, NY

Charges:
•    Grand Larceny in the First Degree, a class B felony, one count
•    Grand Larceny in the Second Degree, a class C felony, seventeen counts
•    Grand Larceny in the Third Degree, a class D felony, six counts
•    Forgery in the Second Degree, a class D felony, six counts
•    Falsifying Business Records in the First Degree, a class E felony, six counts
•    Scheme to Defraud in the First Degree, a class E felony, one count

JAMES GALVIN, D.O.B. 4/30/1971
Queens, NY

Charges:
•    Grand Larceny in the First Degree, a class B felony, one count
•    Grand Larceny in the Second Degree, a class C felony, seventeen counts
•    Grand Larceny in the Third Degree, a class D felony, six counts
•    Forgery in the Second Degree, a class D felony, six counts
•    Falsifying Business Records in the First Degree, a class E felony, six counts
•    Scheme to Defraud in the First Degree, a class E felony, one count

GARRET BRANAGH, D.O.B. 12/10/1972
Mahwah, NJ

Charges: 
•    Grand Larceny in the First Degree, a class B felony, one count
•    Grand Larceny in the Second Degree, a class C felony, seventeen counts
•    Grand Larceny in the Third Degree, a class D felony, six counts
•    Forgery in the Second Degree, a class D felony, six counts
•    Falsifying Business Records in the First Degree, a class E felony, six counts
•    Scheme to Defraud in the First Degree, a class E felony, one count

MCGOVERN AND COMPANY
New York, NY

Charges:
•    Grand Larceny in the First Degree, a class B felony, two counts
•    Grand Larceny in the Second Degree, a class C felony, twenty-two counts
•    Grand Larceny in the Third Degree, a class D felony, seventeen counts
•    Scheme to Defraud in the First Degree, a class E felony, one count

DANIEL MCGOVERN, D.O.B. 9/9/1963
Westport, CT

Charges:
•    Grand Larceny in the First Degree, a class B felony, two counts
•    Grand Larceny in the Second Degree, a class C felony, twenty-two counts
•    Grand Larceny in the Third Degree, a class D felony, seventeen counts
•    Scheme to Defraud in the First Degree, a class E felony, one count

IBEX CONSTRUCTION
New York, NY

Charges:
•    Grand Larceny in the Second Degree, a class C felony, eight counts
•    Grand Larceny in the Third Degree, a class D felony, four counts
•    Scheme to Defraud in the First Degree, a class E felony, one count

ANDRAS FRANKL, D.O.B 1/3/1949
Franklin Lakes, NJ

Charges:
•    Grand Larceny in the Second Degree, a class C felony, eight counts
•    Grand Larceny in the Third Degree, a class D felony, four counts
•    Scheme to Defraud in the First Degree, a class E felony, one count