A man accused of rigging hospital contract bids, defrauding the Internal Revenue Service and filing false tax returns pled guilty last week in the U.S. District Court in Manhattan.
David Porath, the owner of a former New York City insulation service company, had been living in Israel at the time charges were originally filed under seal in February 2010. The indictment was unsealed in March 2010, and, according to a press release from the Department of Justice, Porath was extradited and returned to the United States last February.
According to a DOJ statement released in March 2010 about the indictment, Porath and his co-conspirators submitted fraudulent high bids from competitor companies, which made the bids from Porath’s company appear to be the lowest thereby winning the company a number of bids to provide services to New York Presbyterian Hospital between 2000 and March 2005.
“By submitting intentionally high, non-competitive bids, the co-conspirators deceived NYPH and distorted the competitive market,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division in a statement from the DOJ. “The division will continue to apprehend and bring to justice those who rig bids and thereby deprive the public of the benefits afforded by a truly competitive bidding process.”
Porath faces a maximum of 10 years in prison and a $1 million fine for the bid rigging charge.
The indictment also charged that Porath and Andrzej Gosek, an owner of a Pennyslvania-based asbestos abatement company, and others, defrauded the IRS and filed false tax returns. Gosek pleaded guilty in November 2010.
Porath’s tax fraud charge carries a maximum penalty of five years in prison and a $250,000 fine and the charge of submitting false tax returns carries a maximum penalty of three years in prison and a $100,000 fine.