Fire Alarm Company Executives Plead Guilty to Defrauding New York City in Multi-Million Dollar Scheme

Walter Stanzione and William Neogra, principals of a fire alarm maintenance company, admitted their guilt to a fraud scheme against New York City agencies, as they pleaded guilty to wire fraud conspiracy in federal court in Brooklyn. These charges come after city audits raised suspicions about the financial practices of their company, Fire Alarm Electrical Corp., which held contracts for maintaining fire safety systems across numerous municipal buildings, according to a press release by the U.S. Attorney's Office for the Eastern District of New York.

Under scrutiny by federal forces, including the FBI and the IRS, the accused ran their scheme over a period of more than ten years, whereby they inflated invoices for fire alarm system repairs, potentially placing numerous city buildings' safety at risk and when sentenced, each could see up to two decades behind bars. "For over a decade, the City of New York relied on the defendants to ensure that the fire safety systems in hundreds of city buildings were in safe, working order," United States Attorney Durham stated, capturing the gravity of the deceit wherein the accused leveraged their trusted positions for personal gain, as the wide-scale duplicity emerged involving multiple city agencies and exorbitant overbilling, acording to the same press release.

Through the use of sham entities and marked-up supply costs, Stanzione and Neogra perpetrated their fraudulent billing processes, accounting for millions in ill-gotten returns, the inner workings of their operation were laid out in the public filings, and disclosed in court proceedings by the various representatives from the FBI, DOI, and IRS. "These defendants systematically inflated costs billed to multiple City agencies—including the Department of Citywide Administrative Services, the Department of Education, the Department of Environmental Protection, and the Department of Sanitation, for more than a decade," DOI Commissioner Strauber emphasized, as per the U.S. Attorney's Office.

The defendants' misdeeds didn't happen in isolation, as they tapped into existing fraudulent networks by utilizing companies created for other scams—like those crafted by a convicted EDNY defendant David Motovich. The prosecution, led by Assistant United States Attorneys Paulsen, Gibaldi, and Silverberg, with the support of Paralegal Specialist Kannan, will now see through the justice system's response to such significant violations of public trust and fiscal responsibility. “When vendors exploit their contractual relationship with the City by overbilling, they steal public funds from City taxpayers.  I thank our federal law enforcement partners for their commitment to protect the City’s resources and to ensure vendors who commit fraud are held responsible,” said Commissioner Strauber, in a statement obtained by the U.S. Attorney's Office.