Perdido 03

Perdido 03

Wednesday, June 1, 2011

Company Involved In CityTime Money Laundering Shuts Down, Owners Flee The Country

Mayor Bloomberg thinks he did a heckuva on the CityTime project - at least that's what he told his radio audience last Friday.

But this doesn't sound like a heckuva job to me - it sounds like a widening corruption scandal that has seen the city looted of hundreds of millions of dollars:

WAYNE, N.J. — A New Jersey technology company that had been a major contractor on the Bloomberg administration’s troubled CityTime payroll project has abruptly halted operations and terminated its employees’ contracts amid a widening federal and city investigation, according to a company memo sent out late Tuesday night.

The top two executives of the company, TechnoDyne L.L.C., have also left the country and returned to their native India, according to people familiar with the case who were not authorized to speak publicly because the investigation was ongoing.

Whether the two executives — Reddy and Padma Allen, American citizens who are husband and wife — will return is unclear. While they are mentioned as unnamed co-conspirators in a federal complaint that was made public on Friday, neither they nor their company has been accused of wrongdoing.

The sudden demise of TechnoDyne — which, according to earlier company statements had 500 employees and $100 million in annual revenue — means that for the first time, the scandal has begun to have an adverse effect on a substantial number of people who may have been simply associated with a CityTime contractor, and not necessarily involved in the project.

Led by the United States attorney’s office in Manhattan and the city’s Department of Investigation, the authorities have accused several employees of CityTime contractors of defrauding the city in an $80 million scheme that began in 2005. But even before the accusations, CityTime, an automated payroll project, had become a liability for Mayor Michael R. Bloomberg because of its costs, which have climbed to about $700 million after an initial estimate of $63 million.

On Friday, investigators charged the project’s senior manager, Gerard Denault, with receiving over $5 million in kickbacks, as well as wire fraud conspiracy and money laundering. Mr. Denault urged his employer, Science Applications International Corporation, to hire TechnoDyne as the project’s main information technology subcontractor.

TechnoDyne received $464 million out of $628 million that was paid to Science Applications International and, according to the complaint, funneled $5.6 million to a sham consulting company, said to have been based in India and owned by Padma Allen’s mother, that Mr. Denault actually owned.

The complaint said that there was evidence that TechnoDyne tried to “conceal its interest” in the sham company, “and thereby its connections to the millions of dollars that were being paid to Denault.”

By Tuesday night, as TechnoDyne employees, concerned that the company’s Web site and switchboard were not working, began contacting reporters, the company had issued a memo.

Sent to The Times by an employee, and signed by its human resources department, the memo read, in part: “Due to legal action recently taken against TechnoDyne by a governmental authority, TechnoDyne is unable to continue normal operations,” and as a result, “is terminating the services of its employees and consultants,” effective immediately.

The company — which investigators said relied on Science Applications International for 80 percent of its revenue — pledged to cooperate with immigration lawyers to help workers who have H-1B visas or green cards. The company also said it would keep employees updated on compensation, health insurance and other issues.

Phone calls and e-mails placed to a spokeswoman for the company were not returned. Meanwhile, a visit early Wednesday to the company’s two addresses in Wayne — one in an office park, the other at a UPS store — did not reveal any activity or presence, other than the company’s name tacked onto a building directory. One person who works in the office park said that few people had shown up to TechnoDyne’s office in recent months.

TechnoDyne, which was founded in 1998, billed itself as an information technology consulting company that helped governments and private businesses with software development and cloud-computing management.

The company also enlisted prominent lobbyists in the city procurement process, including Gino P. Menchini, a former commissioner at the city’s Department of Information Technology and Telecommunications, and Agostino Cangemi, a former deputy commissioner at the same agency.

A spokeswoman for Mr. Menchini’s and Mr. Cangemi’s current company, National Strategies, said that the company never worked on CityTime, and that once the TechnoDyne allegations were known Friday, the contract between National Strategies and TechnoDyne was terminated immediately.

Padma Allen, who is also a medical doctor, had gained wider recognition of late. In December, Dr. Allen attended a White House briefing in on minority business issues. In 2010, she was named one of Ernst & Young’s entrepreneurs of the year in New Jersey.

Daily News columnist Juan Gonzalez wrote this morning:

As for Bloomberg, he keeps minimizing the worst scandal of his administration. He touts how the project - more than eight years late - will soon be completed.

Let's see what he says in a few more months.

Indeed, the chutzpah of the mayor to minimize the scandal that has seen hundreds of millions of dollars stolen from the city even as he touts his fiscal prudence in laying off thousands of teachers to save $300 million is, well, I'd like to say it's beyond belief.

But actually with Bloomberg, it just isn't.

It is, however, beyond the pale.


  1. Yes, let's run the schools like a business, that will serve the children well.

  2. You're right again RBE; it truly is beyond the pale. I believe in the end it will be proven that NYC was Bloombucks personal piggy bank.