Mob-Extortion Probe Leads to 38 Arrests

BARBARA ROSS and GREG B. SMITH Daily News Staff Writers

September 7, 2000

Years after organized crime was kicked out of the construction industry, a powerful Mafia family muscled its way back, imposing a "mob tax" that inflated building costs by millions, authorities charged yesterday.

The mob infiltration was uncovered in a three-year probe by Manhattan District Attorney Robert Morgenthau and the New York Police Department that led to the arrest of 38 mobsters, contractors and union officials.

Among those charged was Steven Crea, reputed acting boss of the Luchese crime family, and 10 other alleged members or associates of organized crime.

Morgenthau said Crea oversaw a mob "construction panel" from 1997 until last year that controlled building contracts worth nearly $40 million.

Crea also secretly ran Kent Building Systems, which sold modular classrooms to the Board of Education, he said.

Another mob-controlled company even won a lucrative contract to renovate the Park Central Hotel in midtown, once known as the Park Sheraton.

In the late 1980s and early '90s, state and federal law enforcement officials convicted dozens of gangsters, corrupt contractors and union officials in an all-out effort to kick the mob out of the contracting business.

The 57-count indictment filed yesterday charged that the Luchese family reentered the business in the mid-'90s, extorting contractors by promising protection from other mob families and by buying off corrupt union bosses.

"The price of liberty is eternal vigilance," Morgenthau said.

According to court papers, contractors billed public agencies and private developers on eight projects as if they were paying union wages.

In reality, they hired cheaper, nonunion help and used the savings to bribe union officials and create "no-show" jobs for Luchese mobsters.

Morgenthau said the "mob tax" jacked up the cost of construction by at least 5%.

One of those charged yesterday was Michael Forde, president of District Council of Carpenters, who allegedly committed crimes at a time when a federal monitor was overseeing his mob-tainted union.

Forde was elected in January on a reform ticket.

The case also brought to the surface tensions between Morgenthau and Manhattan U.S. Attorney Mary Jo White, who yesterday announced related charges against six of the 38 people indicted by the state.

Running parallel investigations, sources said, FBI agents and Morgenthau's office clashed for a time over the use of a key informant.

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