Willard Lanham, a former consultant for the city Department of Education (DOE), was charged last Thursday with stealing $3.6 million from the city.
Lanham was hired as a consultant by the DOE and was responsible for Project Connect—upgrading city schools’ Internet and networking capabilities. Lanham made an estimated $1.4 million in salary in his six years with the DOE.
According to the federal charges, Lanham devised a scheme to defraud the city of more money. Prosecutors allege that Lanham hired outside consultants—including his brother, who he paid directly. Lanham then rebilled the DOE at a higher rate and pocketed the difference, prosecutors said.
It is further reported that major companies, including IBM and Verizon, were part of Lanham’s subcontracting scheme and remained silent after witnessing suspect accounting. Both companies deny any wrongdoing and are cooperating with the investigation.
“As charged, Willard Lanham used a complex criminal scheme to help himself to millions in city funds that were meant to help connect New York City public schools to the 21st Century,” said Manhattan U.S. Attorney Preet Bharara. “Lanham effectively stole from schoolchildren so he could buy fancy cars and valuable real estate.”
The investigation was conducted by the city Department of Investigation (DOI) and the Investigation for the New York City School District (SCI).
DOI Commissioner Rose Gill Hearn said SCI investigators were able to untangle Lanham’s lies and expose his alleged scheme.
“As DOI did in the Citytime investigation, we will continue to pursue wrongdoing in city-funded contracts, including sham consultants and shell companies that are subterfuge for bilking taxpayers, and we will follow the money trail so stolen funds can be returned to the city’s coffers,” Hearn said.
Citytime was a city initiative to modernize the payroll system for government employees. Just like in the Lanham case, federal prosecutors charged five men with defrauding the city of millions of dollars using sham consulting and subcontracting firms.
The similarities has city Comptroller John Liu calling for reforms. He called the new allegations that a city consultant stole millions of dollars “infuriating.”
“Even more disconcerting, however, are indications that corporations with billions of dollars in city business have aided and abetted and profited from the scam. As with the Citytime scandal, oversight of subcontracting is acutely needed right now.”
Recently appointed Schools Chancellor Dennis Walcott said the DOE will look to recover the stolen funds and has told various media outlets the department should have been more vigilant.
Joseph Ryan, Lanham’s lawyer, has maintained his client’s innocence and claims Lanham actually saved the city money.
by Eric Yun