After nearly a week of extra-innings deliberation, a New York City jury finally convicted regional concrete testing giant Testwell Laboratories on Feb. 25 of racketeering stemming from allegations it filed fake test results on more than 80 buildings.
Testwell Laboratories, its CEO, V. Reddy Kancharla, and Vice President Vincent Barone were found guilty of enterprise corruption, which carries a mandatory prison term of one year and could put the two executives behind bars for as many as 25 years.
"Testwell’s conduct was reprehensible not only for its pattern of theft and deception, but for its utter disregard for the safety of the public at large, motivated by profit," said Manhattan District Attorney Cyrus R. Vance Jr. “[The] guilty verdicts should send a loud message to companies tempted to skirt safety requirements.”
On Feb. 17, the company and Kancharla were found guilty of 29 counts of falsifying test results and filing them with the city. The jury was told to go back and continue to deliberate other pending charges, including the enterprise-corruption charge, on which they remained deadlocked.
A week later, Barone was convicted on charges of filing false invoices as part of a “scheme to defraud” and altering concrete inspection reports for the JetBlue terminal at Kennedy Airport. Jurors found Kancharla not guilty of the false-invoice charges.
In all, the company is believed to have submitted bogus safety reports to the Dept. of Buildings for 82 different construction projects, including some of the city's most high-profile jobs: One World Trade Center, Yankee Stadium, the 2nd Avenue Subway and the JetBlue terminal.
According to a DOB spokesman, the department is re-testing each of the projects in question and, so far, has received no reported safety concerns on 22 projects. The department is still awaiting results on the remaining 60 projects.
Both Testwell and Stallone Testing Laboratories, New York, were indicted on similar falsification charges within months of each other starting in late 2008, prompting the DOB in 2009 to create a new concrete unit charged with auditing the field and lab work of all the licensed testing laboratories. Since August 2009, the unit has performed more than 130 audits.
The handful of laboratories that are still licensed to test concrete in New York City now likely will see a glut of business added to their backlogs in the weeks and months to come.
“I don’t know that there’s any one or two of them that is large enough to handle the amount of business that is out there,” says one industry executive. “Testwell was by far the largest and definitely one of the best. The business now will have to be distributed among them all.”