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Four IT Consultants Charged With $80M NYC Rip-Off 126

Posted by timothy
from the well-they're-only-tax-dollars dept.
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.'"
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Four IT Consultants Charged With $80M NYC Rip-Off

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  • by Anonymous Coward

    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.

    • by jappleng (1805148)
      Cowboy Neal is gone right now, please leave a message and Chuck Norris will kick the crap out of you. *beep*
    • by russlar (1122455) on Friday December 31, 2010 @07:43PM (#34726022)
      It's old news that slashdot posts old news.
      • 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

      • And it'll be even older news when they repost it tomorrow.

    • by erroneus (253617) on Friday December 31, 2010 @10:44PM (#34727462) Homepage

      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.

    • by fatalwall (873645)

      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.

  • 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.

    • by DedHerring (259209) on Friday December 31, 2010 @07:29PM (#34725934)

      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.

    • by Lakitu (136170)

      So many accusations of criminal behavior are made on Slashdot daily that sooner or later one was bound to be right.

      One of these days, the accusations of criminal behavior will join together to form the script of Hamlet.

      • by deniable (76198)
        I swear there's something rotten in the state of Denmark. There must be crime going on.
    • by Ihmhi (1206036)

      1) Derek Lyons is a murderer!

      2) Plant dead hooker in his home

      3) Get frontpage /. article

    • by nametaken (610866) *

      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. :)

    • by BeanThere (28381)

      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.

  • Umm (Score:5, Insightful)

    by Anonymous Coward on Friday December 31, 2010 @07:22PM (#34725896)

    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.

    • Or just buy an already-existing time system like AutoTime or FieldGlass or OnTime or ..... No need to reinvent the wheel.

      • by Anonymous Coward

        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?

        • I have a hard time imagining someone running for re-election on the basis of having upgraded the time system software.

    • by kesuki (321456)

      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...

    • But it must have been a well vetted and efficient plan because Mikey Bloomberg is running NYC and he brings the skills from the business world that cut through government bureaucracy and waste right? RIGHT???

      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
  • Consultants charge more than they should. News at 11.
  • If guilty they should get a Madoff sentence. The person in charge for the city should also go to jail for malfeasance.

  • by grasshoppa (657393) <skennedy.tpno-co@org> on Friday December 31, 2010 @07:24PM (#34725908) Homepage

    ...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. )

    • 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

      • by Culture20 (968837)

        >>>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]

    • What does T&A mean in this context? All I can really get from your post is payroll. I'm betting it is not the traditional English use as in "tits and arse" that would keep it out of any serious use in Britain, Australia, Canada etc.
      • by arth1 (260657)

        "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.

        • by anyGould (1295481)

          "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,

          • by tehcyder (746570)

            (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..

      • by Bourdain (683477)
        time and attendance?
      • by Anonymous Coward

        Time and attendance. It's the part before Payroll.

    • by Kjella (173770)

      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"

    • by Demonoid-Penguin (1669014) on Saturday January 01, 2011 @12:04AM (#34727938) Homepage

      ...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

  • "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.

  • by rossdee (243626) on Friday December 31, 2010 @07:30PM (#34725948)

    "$80MM"

    Is dollars millimeters a new unit?

    • Re: (Score:3, Informative)

      The symbol for millimetres is mm, not MM. MM would be "megamega". Dollars megamega is equally nonsensical, mind.

    • by farnsworth (558449) on Friday December 31, 2010 @08:23PM (#34726302)
      "M" is the roman numeral for "1,000". In financial contexts, "MM" means "1,000,000" (1,000 x 1,000)
      • by LordKronos (470910) on Friday December 31, 2010 @10:11PM (#34727226) Homepage

        "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?

        • by Kjella (173770)

          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.

          • by Relayman (1068986)
            I haven't ever seen MM used in the financial industry, but it is still common in the printing industry (where it also means 1,000,000).
        • Absolutely. When your financial adviser says your portfolio returned 100% in MMX, he actually means that you can expect to have doubled your money when you retire in 9 million years or so.
        • The year is currently MMX.

          The year is a set of Intel CPU instructions?

          • by toddestan (632714)

            Well, 10 years ago right now was the original Pentium in years. Not 2000, but more like 1999.99999997573.

        • by thomst (1640045)

          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".

      • by Alioth (221270)

        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"

    • by dbIII (701233)
      Not quite, it's a different value.
      $1MM buys you a Library of Congress full of Volkswagens.
    • by Phroon (820247)

      "$80MM"

      Is dollars millimeters a new unit?

      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.

    • by Dabido (802599)
      MM isn't millimetres. mm is (lower case). Mm would be a Mega Metre. MM would be Mega Millions (I guess ... but not entirely sure). So, they stole $80 million x 1 million dollar.
  • 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.

  • There's something deeply ironic about capitalist consultants scamming a city in instituting the labor theory of value for government workers.

    • by iluvcapra (782887)
      You could always pay bus drivers by the number of pickups, case workers by children placed, and teacher per passing grade. But as Domino's Pizza discovered when they made drivers pay for late pizza, perverse incentives can kill. It's very difficult to compensate people according to simple performance metrics, particularly in large organizations with lots of dependencies and large projects over long timescales.
      • 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

        • by anyGould (1295481)

          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:

          • If you let the teachers hand out the marks themselves, you're asking them to take the economic hit for a stupid kid. (I can pass the kid and get paid, or I can fail him and punish myself.) Bad plan. (If you're lucky, the teacher will pass everyone but still try their damnest to teach something; if your unlucky, your kid is doing a lot of poster projects this year.)
          • If you go the "standardized testi
  • 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.

  • These cities really need to stop building proprietary systems to support things that have commercial solutions at a much cheaper cost. If multi-billion dollar corporations can use the software, a city can handle the software. The city of Los Angeles has done this multiple times and wasted hundreds of millions in taxpayer funds for payroll systems that were built, deployed, and ultimately abandoned. Instead of trying to make software to fit your needs in order to please every supervisor, councilperson, su
    • by rainer_d (115765)
      As said In some comment above: with projects like these, it's all about problems at ISO-layer 8 + 9. the software is usually your least concern.
      • by bhcompy (1877290)
        Having done this for a decade for private and public sectors, I disagree. ISO layer 8 or 9 means nothing to me and reveals nothing in a search(of course OSI layer 8 is the unofficial idiot user layer). The problem with custom software of this magnitude is that the entity is not forced to examine anything they do, they just demand and expect the system that replaces whatever they have to work just like the old one. Say your old system is running on PICK(which can be common with very old systems, ADP has b
        • by rainer_d (115765)
          But what you describe looks like an ISO layer 8 + 9 problem to me. People and organizations that somehow want "more modern" software but do not want to change their workflows. Such a project is almost guarranteed to fail IMO.
  • 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

  • $722m to develop a time-and-attendance system? And it's not operational? And the people in charge - if indeed anyone was ever really in charge, which I highly doubt - have not been at least been fired long ago? The whole situation is a scam of huge proportions. I'm amazed only $80m has been attributed to fraud - so far.
    • And the people in charge - if indeed anyone was ever really in charge, which I highly doubt - have not been at least been fired long ago?

      They can't fire them because they never turn up. At least that's what the system says...

  • 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?

    • by ffreeloader (1105115) on Friday December 31, 2010 @11:09PM (#34727610) Journal

      Why the fuck would you stick around after stealing $20MM?

      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.

      • by jjohnson (62583)

        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.

        • by Kjella (173770)

          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.

      • 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.

  • 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.

  • Hmm, I also called it ... http://news.slashdot.org/comments.pl?sid=1597606&cid=31639800 .. looked pretty obvious.

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