Four IT Consultants Charged With $80M NYC Rip-Off 126
theodp writes "It's I-told-you-so time for Slashdot commenter frnic, who smelled a crime last March after reading that New York City had dropped $722 million on its still-under-development CityTime Attendance System. Nine months later, US Attorney Preet Bharara charged 'four consultants to the New York City Office of Payroll Administration ... for operating a fraudulent scheme that led to the misappropriation of more than $80 million in New York City funds allocated for an information technology project known as "CityTime."' Three of the four consultants were also charged — along with a consultant's wife and mother — with using a network of friends-and-family shell corporations to launder the proceeds of the fraud. Dept. of Investigations Commissioner Rose Gill Hearn called it a shame that 'supposed experts hired and paid well to protect the city's interests were exposed as the fox guarding the hen house.'"
Old news for nerds (Score:2)
Um, they were charged two weeks ago. It has been all over the local news and even in the ny times back then.
You guys posted this now like it just took place? The timeliness of this site has really gone downhill even with tech news.
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Re:Old news for nerds (Score:5, Funny)
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It's old news that slashdot posts old news.
You must have been away for a while. It *was* old news that slashdot post old news, the new news is that slashdot reserves first view of the old news for subscribers and the old old news which is no longer news gets posted on hackaday, until its old hackaday news is .... oh wait, I think I see another problem, or maybe I'm just going to have to reconsider string theory
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And it'll be even older news when they repost it tomorrow.
Re:Old news for nerds (Score:5, Insightful)
To be fair, it may be "old news" for some, but not for me. This is the first I have heard of it. So there!
I think if it is relevant and hasn't yet been mentioned on slashdot yet, then it should be posted regardless of its age. After all, age is relative as I am sure others will agree. I do not watch TV news too often and do not get or read the New York Times either. Perhaps it speaks badly for me that I rely on Slashdot as a news portal (though not exclusively, it is still one of many sources) but as things go, slashdot provides a "readers digest" version of the news from all over.
And hey! It wasn't a dupe as far as I can tell, so it's all good.
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if its taken two weeks for someone to submit this then the only person you have to blame is yourself seeing as you knew about it two weeks ago.
A stopped clock is still right twice a day. (Score:5, Interesting)
It's I-told-you-so time for Slashdot commenter frnic, who smelled a crime last March
So many accusations of criminal behavior are made on Slashdot daily that sooner or later one was bound to be right.
Re:A stopped clock is still right twice a day. (Score:4, Insightful)
So many accusations of criminal behavior are made on Slashdot daily that sooner or later one was bound to be right.
True, but not the real question here: what is fmic's personal ratio of accusations:indictments? Better than most Slashdot commenters, I reckon. That's worth noting.
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[Citation Needed]
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Survivorship/selection bias.
...but it only scores 1 (Score:2)
What's slightly depressing is that the comment scored only 1. Of course, this was probably because it was (rightly) modded down by the spelling and grammar police.
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One of these days, the accusations of criminal behavior will join together to form the script of Hamlet.
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1) Derek Lyons is a murderer!
2) Plant dead hooker in his home
3) Get frontpage /. article
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I haven't prognosticated much here (or at least not successfully) but it might be fair to guess that any government project with a price tag over $1M has some element of shadiness in it, and goes up exponentially for each additional million.
If you find a project worth $700 million dollars that doesn't have shady business deals going on in the background, then you've got surprising news. :)
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Except in this case there were genuine clues the size of Texas - i.e. it wasn't a guess - the whole thing stank to high heaven.
Re:But when Consulting companies do it... (Score:4, Insightful)
But that was a corporation. Corporations and their boards never go to jail except in enron-style cases.
And that was a tort, not a crime. Learn the difference. It may save your life.
They're being charged with a crime, and it's 4 guys.
It's different this time. The people are small enough to be crushed without too much effort or revelations of $IMPORTANT_PEOPLE as part of the fraud.
--
BMO
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its not different this time. your points are valid, but claiming this is 'new' is wrong,
they never would have been prosecuted at all if someone hadn't been determined to try to right all the wrongs again, and managed to find this group.
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I didn't claim it's new. I said "this time." Don't put words in my mouth.
While you pulled me into an argument about semantics, you're wrong. Learn to read.
--
BMO
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Deloitte hit with $30M lawsuit over ERP project [computerworld.com]
My favourite part from that link is :
"The 38-page complaint alleges that Deloitte was lying when the company promised to assemble a team of its "best resources" for the project and when it claimed to have "deep SAP and public sector knowledge" when marketing itself to the county."
How naive are the folks at Marin county? In my experience, every single consulting firm in existence lies about the team they're going to place on a project. I have seen some utterly staggering misrepresentations.
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And perhaps if they got called on it more often they wouldn't be so fast to lie.
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Bah, getting hit with a lawsuit tells nothing of the real story, I was part of a consulting project once where they at least considered it. My most vivid moment from that project was a fairly critical workshop I held, the topic was well announced, the entire core team of the customer was present and if they at any time needed assistance it was their task to call inn additional resources. At the first semi-hard question of the workshop their project lead said they didn't have the competence present to decide
Umm (Score:5, Insightful)
How does something "slip through the cracks" for 7 years?
A project that was $68 million total... instead was $100+ million (a year?!!)
If the city DIDN'T spend MORE-THAN-HALF-A-BILLION maybe they wouldn't be raising the fare on the subway/bus for the 3rd time in just a few years.
Here's a thought.. once a year look at projects and see if they were supposed to be done already. You can pay someone $1,000 a MINUTE to do this and still save money by finding another project like this.
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Or just buy an already-existing time system like AutoTime or FieldGlass or OnTime or ..... No need to reinvent the wheel.
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How would that make you awesome?
Working for the city council is all about being awesome.
Do Awesome people buy off the shelf software? When was the last time you saw that in a Hollywood blockbuster?
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I have a hard time imagining someone running for re-election on the basis of having upgraded the time system software.
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How does something "slip through the cracks" for 7 years?
A project that was $68 million total... instead was $100+ million (a year?!!)
If the city DIDN'T spend MORE-THAN-HALF-A-BILLION maybe they wouldn't be raising the fare on the subway/bus for the 3rd time in just a few years.
Here's a thought.. once a year look at projects and see if they were supposed to be done already. You can pay someone $1,000 a MINUTE to do this and still save money by finding another project like this.
here is what i can tell you head over to pandora radio and make a station of old old music. folk songs sometimes explain things like that...
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Sorry for the snark, but I just get tired of hearing that business people are so much better at running government and yet when they take over, the same graft and corruption goes on and in the meantime they cut services and raise prices in a way that's punitive to the least among us, usually to just
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I did a Time and Attendance system in three months by myself, starting from scratch with a new technology (Powerbuilder). Deployed to 1000+ people in 16 divisions across the U.S in less than 6 months. It cost them $20,000 for time and another $20k for hardware and support.
Even if they delivered on time and on budget, they ripped off the city.
How many unions did it deal with? How did it handle Civil Service regulations? Would it scale up to handle 300,000+ employees in 100+ different agencies each with its own policies over and above the CS and union ones? Believe me, I'm not trying to justify the CityTime team, just illustrating some of the issues faced by NYC government trying to get a handle on its timekeeping. (My agency uses something that works quite well and would definitely scale up to deal with the things I asked above.)
News at 11 (Score:1)
Life without parole (Score:2)
If guilty they should get a Madoff sentence. The person in charge for the city should also go to jail for malfeasance.
The problem with T&A in government... (Score:4, Interesting)
...is that everyone does it differently, and no one wants to conform to a uniform system. Why, you might ask? Because the current system is in place and, more importantly, people have learned how to game it.
I went through something like this years ago with a local government t&a project. There was a core group that understood it's value ( namely, IT and payroll ), but everyone else had been using tricks of the current, in place system ( which varied from dept to dept ) to get longer lunches, swap shifts or plain, flat out not work and get paid for it.
We never did get universal buy-in for the project, and it ended up dieing ( although, to be fair, the vendor didn't help things much ). Even in the best of times, T&A is a highly complex subject that almost no one understands. When you have people actively trying to undermine your efforts...well, you can imagine how much progress one might make.
( note: the depts that gave us the most headaches, btw, were fire and police. The "old boy" network had been in place so "billy bob" might take off a couple extra hours because he was the chief's friend. Needless to say, the new time keeping software didn't keep track of that "accurately", and people's feelings got hurt. )
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I don't understand why T&A is "complicated". It consists of four round globes, two front and two rear that men find irresistibly attractive (and thus procreation happens).
Oh okay. I'll be serious.
Back in my old hourly days, I was handed a card. I swiped the card through the reader when I walked in the door and swiped it again when I walked out. If I worked in a different department I would "badge out", type in the new department number, and then badge in again. That seems like a very simple method
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>>>The problem with T&A in government...
There is no problem. Interns in government are hot. See? (holds up Girls of DC issue)
When did Wonder Woman, Power Girl, Cat Woman, et al start working as interns? And why don't I have a Girls of DC issue?
[GrouchoMarx](Not that I don't have some issues)[/GrouchoMarx]
Overloaded acryonym needs explaining (Score:2)
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"Time and Attendance" at a guess. Like the punch cards that most civilised nations done away with decades ago, realising that workers who aren't micromanaged and monitored for every minute have higher productivity.
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"Time and Attendance" at a guess. Like the punch cards that most civilised nations done away with decades ago, realising that workers who aren't micromanaged and monitored for every minute have higher productivity.
In some cases... I find that if you can't measure on results, then you're kinda stuck with "swipe-in/swipe-out". Doubly if the job is a public-facing one. (While your receptionist might feel "empowered" if he doesn't have to clock in/out, you might end up covering the desk when he empowers himself to take an extra hour lunch...)
Also, I know a few folks who became much *happier* when they got the swipe cards. Why? Because now there's proper documentation for all the overtime they're putting in!
Was a swiper,
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(While your receptionist might feel "empowered" if he doesn't have to clock in/out, you might end up covering the desk when he empowers himself to take an extra hour lunch...)
That's why you have managers, disciplinary procedures and so on in most organisations..
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Time and attendance. It's the part before Payroll.
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We never did get universal buy-in for the project, and it ended up dieing ( although, to be fair, the vendor didn't help things much ).
You had a stupid vendor then. Smart vendors are just as much in on how difficult the switch-over process in government is. What it usually means is that the entry ticket is cheap (not the first shot is free, but close) but everything after that, especially things they didn't demand a quote for in the RFQ is big bucks. Nothing is impossible in IT - though sometimes a vendor will spectacularly fail to deliver - it's just a matter of how much it'll cost. Inevitably almost all business start with "use standard"
The problem with T&A with any client (Score:5, Insightful)
...is that everyone does it differently, and no one wants to conform to a uniform system. Why, you might ask? Because the current system is in place and, more importantly, people have learned how to game it.
I went through something like this years ago with a local government t&a project. There was a core group that understood it's value ( namely, IT and payroll ), but everyone else had been using tricks of the current, in place system ( which varied from dept to dept ) to get longer lunches, swap shifts or plain, flat out not work and get paid for it.
We never did get universal buy-in for the project, and it ended up dieing ( although, to be fair, the vendor didn't help things much ). Even in the best of times, T&A is a highly complex subject that almost no one understands. When you have people actively trying to undermine your efforts...well, you can imagine how much progress one might make.
( note: the depts that gave us the most headaches, btw, were fire and police. The "old boy" network had been in place so "billy bob" might take off a couple extra hours because he was the chief's friend. Needless to say, the new time keeping software didn't keep track of that "accurately", and people's feelings got hurt. )
The second most important single document in project management - the stakeholders list.
The most misunderstood term in project management - stakeholder.
Stakeholder == anyone who might possibly want to stab you with a pointy stick.
Most important document - a list of motivations and pain points of the stakeholders. Third most important - payment terms. Fourth - project delivery specifications.
Feel free to disagree, and, good luck.
;-p
Bad Analogy (Score:2)
"Jill Hearn -- whose office uncovered the massive scam -- called it a shame that 'supposed experts hired and paid well to protect the city's interests were exposed as the fox guarding the hen house.'"
More like the fox consulting the guy guarding the hen house.
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To be fare, he didn't rape San Francisco of $80 million. He simply highlighted their incompetence.
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For most people in government, that is worse than stealing the $80 million.
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To be fare, he didn't rape San Francisco of $80 million. He simply highlighted their incompetence.
By being a dickbag, as GP said.
WTF is Eighty dollars millimeters? (Score:4, Interesting)
"$80MM"
Is dollars millimeters a new unit?
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It's helpful for the people who use the long-scale [wikipedia.org] when counting.
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Maybe it means Mega Millions...
Re:WTF is Eighty dollars millimeters? (Score:4, Informative)
Re:WTF is Eighty dollars millimeters? (Score:5, Informative)
"M" is the roman numeral for "1,000". In financial contexts, "MM" means "1,000,000" (1,000 x 1,000)
Uhhh...it would seem to me that, if we are going the roman numeral route, MM means 2000 and not 1000x1000. The year is currently MMX. Does that make it year 10,000,000?
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Uhhh...it would seem to me that, if we are going the roman numeral route, MM means 2000 and not 1000x1000.
You would be right. The financial industry has chosen a different definition though, it's sorta like the k = 1024 vs k = 1000 debate in IT. You can argue as much as you want, but to an economist MM = 1,000,000.
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The year is currently MMX.
The year is a set of Intel CPU instructions?
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Well, 10 years ago right now was the original Pentium in years. Not 2000, but more like 1999.99999997573.
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The year is currently MMX. Does that make it year 10,000,000?
No, it makes it the year "Obsolete Intel Media Acceleration CPU Extensions".
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Given that MM in Roman numerals is 2000, not 1,000,000 - I think "MM" really means "I claim to be an expert about money"
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$1MM buys you a Library of Congress full of Volkswagens.
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MM obviously stands for MegaMillion, and with the $ the number is clearly in hexadecimal, so the value represented is 120 MegaMillions. With the current value of the MegaMillion jackpot in excess of 242 Million USD, NYC was therefore ripped off for over 29 Trillion USD.
Clearly.
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MM is pretty universal for million.
At best MM should stand for 2,000 as it is a highjacking of roman numerals that fails to accurately implement them.
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MM is commonly used for million. Just not in your circles. Different cliques use different jargon.
So what clique exactly uses MM to mean millions? I've never seen it used deliberately like that anywhere.
SAIC and Spherion - really? Lost US taxes (Score:2)
I'm surprised to see these two companies accused of misbehavior. Especially SAIC which has been around for a long time doing government work in DC.
Also since New York is not a self-sufficient city, but heavily subsidized by the US government, this loss of taxpayer dollars affects all of us. It's obviously worse for New York State residents, but all americans were defrauded on this one.
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lol yeah I'm sure you would each make trillions of NY-bucks trading each other fraudulent derivatives in hobo urine futures.
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>>>If NYC were to break off of the union and become an independent free city
They would quickly bankrupt themselves. And companies that are currently receiving huge US subsidies to set-up shop in NYC, would no longer get those handouts, and move somewhere else like Philly or Boston. In short order NYC would resemble Rome City after there was no longer an empire to support it (services collapsed, people fled the city, and its population plummeted from 5 million to 100,000).
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The people who live in NY State outside of NYC would love to see NYC break off and float away.
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I suspect that almost all people who live in the USA outside of NYC would love to see NYC break off and float away.
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The NYC economy is basically trading on the perceived worth and futures of the products from unimportant hicktowns.
There's some added cash-flow paying for 'teh pretty lites' and charging fees to movie studios cos you're that important.
Remind us what the last actual product from NYC was?
lol government spending (Score:1)
There's something deeply ironic about capitalist consultants scamming a city in instituting the labor theory of value for government workers.
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Thats the problem with performance based metrics. When organizations use these the results are terrible. If you have assemblymen performance based on the number of screws they put it per house then all hell will break lose when an engineer discovers they can save money by making the widget with less screws. All of the sudden their job is on the line for something the engineer thought of. People piss in each others area and undermine the company as a whole. There are many examples of this.
Teachers cheat by t
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Teachers cheat by the way if your job is on the line with grades.
It's not cheating. Paying by the grade (or worse, firing by the grade) is a stupid plan either way you do it:
Quote common in fortunate 1,000 companies (Score:1)
It can happen whenever the person in a corporation approving projects or supplies is the same one in charge of billing and receiving.
You can say CompanyA bought x from MegaCorp. Turns out MegaCorp is owned by someone else in CompanyA and all the paperwork checks out fine.
It shows the needs for controls. Many white collar crimes do these sorts of things as it is much easier not to get caught then insider trading or physically stealing something.
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yes, a specific type of controls that the accountants call "separation of duties"
stop building proprietary systems! (Score:1)
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usual suspects (Score:2)
These large consulting firms like SAIC suck all the oxygen out of the room in overhead and are prime contractors for one mega software disaster after another. If I were contracting a project like this out I would want to see a working system of anything remotely resembling the project up and running with test data.
If the consultancy can't demonstrate a running project of similar scope, complexity, and scaling, then it is a mistake to choose them to do your project. If they can demonstrate it, then a shell o
And only $80m of $722m was fraud?? (Score:2)
try the seafood platter (Score:2)
They can't fire them because they never turn up. At least that's what the system says...
I don't understand (Score:2)
If they actually pulled $80MM out between them, that's $20MM each. That's money that allows you to disappear, to buy a house on a beach in Thailand or Costa Rica and never work or care again--or if you hunger for civilization, to construct a new identity that creates a totally clean break with the theft.
Why the fuck would you stick around after stealing $20MM?
Re:I don't understand (Score:4, Insightful)
You actually have to ask that question? The answer is so obvious it's impossible to miss.
Greed makes you stupid. Greed is self-destructive. Greed keeps you thinking you can keep on getting away with anything.
So, that's the answer? The same thing that caused them to want to steal in the first place: Greed.
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I do recall seeing a police detective interviewed, saying something along the lines of what you said: Criminals are greedy, so they're stupid, so they're usually quite easy to catch. People smart enough to get away with crime are smart enough to now that it's usually not worth doing.
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I do recall seeing a police detective interviewed, saying something along the lines of what you said: Criminals are greedy, so they're stupid, so they're usually quite easy to catch. People smart enough to get away with crime are smart enough to now that it's usually not worth doing.
Well, the cops got a pretty big sample bias - their idea of the average criminal is the average criminal they catch. And by case volume it's even more skewed by the deadbeats who don't do much except petty crime. Smart probably doesn't just involve avoiding the cops, it probably also involves picking the crimes that are worth doing, it'd be stupid to assume smart people commit the same stupid crimes as stupid people.
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Greed makes you stupid. Greed is self-destructive. Greed keeps you thinking you can keep on getting away with anything.
While I won't go quite that far, the reason you stick around is to get more money.
Yes, I could live out the rest of my life quite handsomely on $20 Million. But I could live out the rest of my life even better with $40 Million. Or $60 Million.
$642 still missing? (Score:2)
OK, so $80M is accounted for, where's the rest?
WP says NYC employs a quarter million people - some fraction of those are hourly.
This project should be priced closer to $10/head, not $5000.
Told you so (Score:2)
Hmm, I also called it ... http://news.slashdot.org/comments.pl?sid=1597606&cid=31639800 .. looked pretty obvious.
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