An electrical contractor who was supposed to be fixing problems in kitchens used to feed city school kids allegedly bilked the Department of Education out of more than $ 1 million through wild overbilling and charging for non-existent work, the feds revealed Friday.
Derval Lazzari of Queens was arrested Thursday and later charged in Manhattan federal court with using two companies he co-owns to submit fraudulent invoices for repair work – including at least 8,000 bogus invoices for carbon dioxide “leak tests” on school refrigerators that never took place.
Lazzari allegedly charged the DOE $ 157.50 a pop for these fake exams between 2006 and 2012 – even as his companies billed non-DOE schools between $ 15 and $ 65 for the same tests.
“Carbon dioxide is not [even] used in connection with conducting a leak test of refrigeration units,” said Jason Samuels, a criminal investigator for the Manhattan US Attorney’s office, in the complaint.
“In fact the carbon dioxide test … billed to DOE in connection with leak tests of refrigeration equipment is actually used for air testing in cooking and heating equipment, and has no application for refrigeration equipment.”
Other bogus billings by Lazzari’s Brooklyn-based Acme American Repairs Inc. and Acme Refrigeration Inc. included charging DOE $ 572 for circuit breakers that cost $ 18 and billing $ 200 to $ 300 for electric outlets that cost between $ 2 and $ 22, the complaint says.
“The arrest of Lazzari by [federal authorities] is a significant step towards the recovery of stolen educational funds,” said Richard Condon, DOE’s special commissioner of Investigation.
His office began investigating Lazzari in 2012.
Lazzari, a 54-year-old Argentinean native , was charged with wire fraud and conspiracy to commit wire fraud. He faces up to 20 years behind bars and up to $ 250,000 on fines.
The alleged scheme took place between 2006 and 2013 and involved other co-conspirators not mentioned in the complaint. The feds declined comment when asked if other arrests were pending.
DOE in 2005 awarded Acme Repairs an estimated $ 7.5 million contract to repair school cooking units in Bronx and Quens and refrigeration equpiment in Queens. The contract wound up costing DOE $ 22 million, the complaint says.
In 2010, DOE awarded Acme a second contract to repair steel kitchen equipment between May 2011 to February 2013. That contact was estimated to run $ 1.76 million and wound up costing DOE “more than $ 1 million,” the complaint says.
Messages left with Lazzari at Acme were not returned. An Acme employee who called himself “David” said he was unaware of the charges and hung up the phone when asked to give his last name.
A DOE spokesman said he needed to familiarize himself with the charges before commenting.
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