Saying the CityTime payroll scam illustrates how the city’s contract-awarding “process is in need of significant reform,” a federal judge on Monday sentenced mastermind Mark Mazer and his two trusted accomplices to 20 years each behind bars for pulling off a scam that was “a classic tale of greed and corruption.”
“The city’s contracting process has created an atmosphere that lacks adequate and effective oversight,” said Manhattan Judge George Daniels after dishing out the tough sentences to Mazer, Dimitry Aronshtein and Gerard Denault. He then ordered them remanded without bail.
“It is an invitation for not just waste, but corruption and fraud,” added Daniels, who ordered the defendants to forfeit $47 million in assets to the government.
Daniels, a former counsel for then-Mayor David Dinkins, also warned that until “significant reform is instituted” at City Hall, criminal proceedings involving similar fraud cases will “continue to be routine.”
After a six-week trial, a jury in November convicted the men of defrauding the taxpayer-funded, $700 million project to modernize the city’s payroll system.
Mazer, 50, of Manhasset, was found guilty of wire fraud, bribery, money laundering and other charges.
Denault, 52, of Danbury, Conn., who was program manager for the system’s primary contractor, Science Applications International Corp., was convicted on similar charges.
Aronshtein, 53, Mazer’s uncle and an Oceanside, LI-based subcontractor for CityTime, was convicted on bribery charges and conspiracy to violate the federal Travel Act.
The men, who prosecutors claimed “treated the city like their own giant ATM machine,” were busted in December 2010.
Daniels gave the maximum sentence for each count the three were convicted of — 105 years for Denault, 80 for Mazer and 40 for Aronshtein. But he ruled the sentences should be served concurrently, meaning they are each required to spend 20 years in prison.
The judge said the men “demonstrated a lack of remorse and taking responsibility.”
SAIC has paid the city $550 million to avoid prosecution for profiting from the scandal, in which the cost of a high-tech municipal payroll system ballooned from $63 million when the contact was awarded in 2000 to $700 million by the time the defendants were arrested.
Prosecutors blame the skyrocketing costs on an epic fraud involving kickbacks, systemic overbilling and an international money-laundering conspiracy.
Lawyers for the defendants declined to comment following the sentencings, but told the judge they plan to appeal.
Aronshtein, who was the only defendant to address the judge before being sentenced, expressed remorse and said he’s been wiped out financially since being arrested.
“I feel like the biggest loser in the world to put my wife and family in this situation,” he said.