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Friday, February 26, 2010

Testwell Labs, CEO Guilty of Enterprise Corruption

Business Week
Testwell Laboratories Inc., its chief executive officer and vice president were found guilty of enterprise corruption for faking tests on concrete and steel at such New York buildings as Freedom Tower, the Jet Blue Terminal at JFK International Airport and Yankee Stadium.

A jury in New York state Supreme Court in Manhattan came back today with the guilty verdicts on charges of enterprise corruption, the top last remaining count against Testwell, its Chief Executive Officer V. Reddy Kancharla and vice president Vincent Barone. The jury had given partial guilty verdicts against the three on a myriad of other counts yesterday and last week.

Enterprise corruption is the state’s version of a racketeering charge. It carries up to 25 years in prison. Sentencing was scheduled for April 7.

Testwell, one of the largest construction materials testing companies in the New York metropolitan area, was accused by the Manhattan District Attorney’s office of fraud involving 102 projects, including well-known buildings, firehouses, schools, apartment buildings, hospitals and hotels.

Faked Tests

Prosecutors alleged that Testwell often failed to perform tests, faking them instead. They also were accused of not performing required field tests.
Defense attorney Paul Shechtman, who represents Kancharla, called the verdict “surprising and disappointing” in light of other charges Kancharla was acquitted on earlier. Kancharla was acquitted on more than 20 counts and other pattern acts, many involving offering a false instrument for filing steel reports and invoices. He also was convicted of 14 counts and 20 pattern acts, including a scheme to defraud.

“Obviously, he intends to appeal,” said Shechtman.

Attorney Andrew Lankler, who represents Barone, declined to comment. Cesar de Castro, who represents the company, said he is disappointed with the “incorrect” verdict and is considering an appeal.

Manhattan District Attorney Cyrus R. Vance Jr. said in an e-mailed statement today that “today’s guilty verdicts should send a loud message to companies tempted to skirt safety requirements: This Office will aggressively investigate and prosecute this type of conduct to the fullest extent of the law.”

“Testwell’s conduct was reprehensible not only for its pattern of theft and deception, but for its utter disregard for the safety of the public at large, motivated by profit,” Vance said.