NEW YORK (1010 WINS) — The president and vice president of a Queens contractor that was awarded $12 million in New York City contracts to do work on homeless shelters were arrested on Wednesday for ripping off the city, according to the Department of Justice.
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Liaquat Cheema, 62, and Ali Cheema, 31, the president and vice president of AFL Construction Co. Inc., allegedly lied to the city about work that was completed and submitted phony expenses for reimbursement.
The city hired the company to do general maintenance, landscaping, roofing and snow removal for homeless shelters across the city.
From at least 2014 through at least 2018, the Cheemas siphoned off public funds through the contracts by submitting fraudulent invoices, inflating the amounts paid for materials or outright lying about work being completed, according to prosecutors.
The city paid out at least $8 million of the $12 million promised for the contracts before the plaintiffs were caught.
The defendants would allegedly present the city with checks as evidence of pay for work completed by staff. They would then pass the checks off to three co-conspirators, who were also arrested on Wednesday to deposit in their own bank accounts and launder the ill-gotten gains.
Irfan Bajwa, 42, Shouket Chudhary, 64, and Khizar Hayat, 46, were all arrested Wednesday for participating in the scheme.
The elder Cheema, Bajwa, Chudhary and Hayat were also charged with a separate scheme to defraud Medicaid.
“These defendants, contractors who work on New York City homeless shelters, used their contractor status to fraudulently siphon funds from the City,” said Department of Investigation Commissioner Jocelyn Strauber. “The charged scheme was vast and involved overbilling for material, false claims to prompt the issuance of paychecks to purported workers and the diversion of those paychecks to defendants, and the submission of false certifications that enabled defendants to wrongfully obtain Medicaid benefits.”
Liaquat faces up to 54 years in prison for wire fraud conspiracy, money laundering conspiracy, health care fraud conspiracy and aggravated identity theft.
Ali faces up to 42 years in prison for wire fraud conspiracy, money laundering conspiracy and aggravated identity theft
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