Legal
Contractor Navillus Ex-Execs Convicted in Union Embezzlement Scheme
Image: Navillus
A federal jury in New York convicted three former Navillus Contracting executives of embezzling from union benefits funds by evading required contributions for its workers.
Following a three-week trial, Donal O’Sullivan, Navillus’ founder and former CEO and president; Padraig Naughton, the company’s former financial controller; and Helen O’Sullivan, a former payroll administrator, were convicted in U.S. federal district court in Brooklyn, N.Y., on Oct. 22 on 11 counts including wire fraud, mail fraud, embezzlement from employee benefits funds, submission of false remittance reports to union benefits funds and conspiracy to commit those crimes.
Attorneys representing the defendants did not immediately respond to requests for comment. None of the three have worked for the company since heir indictments in 2020. Navillus itself was not named as a defendant in the case.
Between 2011 and 2017, prosecutors say the trio schemed to avoid making more than $1 million in required contributions to union health, pension and vacation funds in violation of its collective bargaining agreement with seven unions by placing workers on the payroll at a different “consulting” company. To hide the scheme, that company issued fake invoices.
Navillus sent more than $7.2 million in payroll scheme funds to the consulting company, according to an indictment.
The defendants each face as much as 20 years in prison.
Navillus is one of New York City’s biggest contractors. It specializes in concrete and tile work, high-profile projects that include One World Trade Center, Madison Square Garden upgrades in 2013 and the 2017 Grand Central Station renovation.
As ENR previously reported, Navillus faced legal and financial trouble over union benefits funds payments.
In 2017, a judge ordered the company to pay more than $75-million to union pension and benefit funds over a lawsuit filed by five unions. The company then sought bankruptcy protection, and was able to emerge after reaching a settlement with the unions for about $26 million.
