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NYC software project scam culprits charged

Jacob Nthoiwa
By Jacob Nthoiwa, ITWeb journalist.
Johannesburg, 27 Jun 2011

NYC software project scam culprits charged

NetworkWorld.

CityTime, which is supposed to modernise New York's system, was begun in 2003 with a budget of US$63 million. But since then, costs have spiralled to more than $600 million, with more expenses yet to come, prompting authorities to level a sweeping criminal probe.

According to Courthouse News Service, CityTime, a program given more than $600 million to design payroll software for New York City employees, was “corrupted to its core,” Manhattan US Attorney Preet Bharara said at a press conference.

Alleging that “virtually all” of the program's money was tainted by fraud, Bharara revealed new charges last week against four of eight individual defendants and one corporation listed in the indictment, charged with bilking the program from 2003 to 2010.

“In short, today we allege what many have long feared: The CityTime project was corrupted to its core by one of the largest and most brazen ever committed against the City of New York,” Bharara said.

IT Business Edge says, authorities claim that Reddy and Padma Allen, the CEO and CFO of New Jersey systems integrator TechnoDyne, a subcontractor on the project by SAIC, the primary contractor, engaged in an elaborate overbilling and kickback scam that resulted in "virtually all of the well over $600 million that the City paid to SAIC ... [being] tainted, directly or indirectly, by fraud."

Carl Bell, a former SAIC employee and CityTime systems engineer, has pled guilty to multiple charges and claims he received at least $5 million in kickbacks from TechnoDyne and the Allens “to ensure the continued success of the fraudulent scheme.” Gerard Denault, another former SAIC employee, who was recently arrested in connection with the alleged scheme, allegedly took more than $9 million in kickbacks.

The Allens have fled to India, with much of TechnoDyne's operations and many of its employees being transferred there, as well.

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