Four consultants hired to eliminate waste and fraud in New York City’s municipal payroll were arrested last week on charges of stealing $80 million from city coffers. This huge problem of the increasing computerization of government under Bloomberg, but especially one particular project that ballooned from $60 million to $700 million during his administration to computerize the payroll system of the city government. And it’s now exploded into the biggest scandal of the entire Bloomberg era. the FBI arrested six people, four of them computer consultants for the city. The following day, Bloomberg was forced to remove the director of the payroll administration. Investigations are continuing. There could be other arrests. A massive theft involving a huge criminal conspiracy to launder money and bilk the city out of the least $80 million and possibly even more money.
The major defense contractor who was working on this project, Scientific Applications International Corp., SAIC—the MTA, the Transit Authority, canceled a $118 million contract they were about to get, and then the city canceled another $40 million contract that they were about to get. And there are more investigations going into what SAIC did, involved in this contract
These are the consultants who were making the payroll system and the timekeeping system. They were supposed to make sure that the average city worker did not steal time on their time sheets, when they were doing all the stealing themselves, according to federal prosecutors.
But after several people had been arrested and released on bail, the investigators began seizing bank accounts across the city, because they had many phantom companies. And they went to one bank where they seized a safe deposit box with—where they found $850,000 in cash in the safe deposit box. And as they were there in the bank, one of the people they had arrested the day before came to the bank with a dufflebag, apparently trying to take the cash before the prosecutors got to it, but the person got there a little late, as they had already seized the money.
– from democracynow.org