Contractor gets prison for $800,000 scam
Latham man exploited minority-owned firms, pension fund benefits
A Latham contractor exploited minority-owned firms and a pension fund, then bought an RV, snowmobiles.
A former Albany contractor who exploited minority-owned businesses in an $800,000 scam was sentenced to 3 1/2 to 12 years in prison Friday — and received a tongue-lashing from the judge for minimizing his criminal behavior.
Michael Martin, 47, of Latham, the former owner of now-defunct Eastern Building & Restoration, listened as one of his victims, 66-year-old Molain Gilmore of Schenectady, described how his crime devastated her financially. She said she can no longer afford a car and is living off Social Security.
“This is horrible financially for me,” Gilmore, the former owner of Precision Environmental Solutions, an asbestos removal business, said outside court after the sentencing. “This has upended my whole life. For 47 years, I drove. I can’t. “
Martin apologized to the victims, as well as the court and his family, but did not stop there.
“It was never my intent to take advantage of anyone,” Martin told Schenectady County Judge Matthew Sypniewski. “The person you see here today, your honor, does not represent the person who I am. Lastly, I’d be truly grateful if you could recommend a shock incarceration program.”
Shock incarceration allows inmates to serve six months in a military boot camp-style program instead of prison.
“You should have stopped at ‘I’d like to apologize,’” the disgusted judge told Martin, “because everything after that was either disingenuous or misdirected. You tell me that you didn’t have intent to take advantage of anyone? That’s exactly what you pleaded guilty to doing. So for me to have to remind you of that just represents to me that
you really have no insight and accountability for your actions. You deserve each and every day that you’re incarcerated.
“And no, I’m not recommending Shock,” the judge added.
The program is typically reserved for young adults who commit lesser crimes.
Martin and Eastern’s comptroller, D. Scott Henzel, victimized Precision and another minorityowned business, Lorice Enterprises, as well as the theft of pension fund benefits from more than 50 Eastern employees, according to state Inspector General Catherine Leahy Scott, whose office brought the case.
“This former corporate executive exploited smaller struggling businesses and his own employees with self-indulgent criminal schemes that shamelessly shattered the livelihoods of his many victims. He corrupted a laudable program meant to bolster minority-owned businesses and instead ruined them financially while enriching himself,” the inspector general said.
Martin spent the proceeds of his crimes on Harley-davidson motorcycles, snowmobiles, personal watercraft, a $170,000 RV, purchases for his girlfriend and trips to the Dominican Republic and the Bahamas.
The state sets aside a percentage of public contracts for bids by women and minority-owned businesses. In 2014, Gov. Andrew Cuomo increased the goal for the percentage of state contracts for those businesses to increase from 20 percent to 30 percent by 2019.
Martin and Henzel approached two companies, Lorice Enterprises and Precision Environmental Solutions, claiming to offer them an opportunity to partner with Eastern. It was supposed to help the companies successfully operate and bid construction projects. Instead, Martin and Henzel took over the day-to-day operations of the businesses, including decisions on staff, bids, banking and other financial matters. The companies were minority-owned on paper only, officials said.
“I’m $300,000 in debt with taxes alone,” said Gilmore, “It’s unfortunate that it’s come to this . ... I don’t hold any animosity. I just want my money.”
To cover up their crimes, Martin and Henzel falsely certified on public works projects that they had paid pension payments to every employee.
In 2014, Eastern went out of business, declaring itself financially unable to perform numerous contracts. Martin then moved Precision from Albany to Scotia, where Precision paid the landlord $1,800 a month in rent. Martin made a fake rental agreement between Precision and a fictitious company — Delta Land Holdings — in which Precision paid Delta more than $9,000 a month in “rent,” which Martin stole, officials said.
Martin ripped off $154,547 from Precision through the rent scam. He stole another $204,995 from Allegheny Casualty with bogus claims that Precision was a subcontractor of Eastern that was never paid for work. In reality, Precision had not been subcontractor on the project.
Earlier this year, Martin and D. Scott Henzel, 52, of Albany were arrested on charges including identity theft, false filing, failing to pay prevailing wage and scheming to defraud.
Henzel pleaded guilty last month to a failure to pay prevailing wages, a felony. He will be sentenced Jan. 8.
Martin was separately charged in another indictment with grand larceny and insurance fraud.
Michael Martin, center, with his attorney Sam Breslin, at his sentencing. Martin spent crime proceeds on motorcycles, snowmobiles and an RV.