Wayne Husband and Wife Charged in New York Wire Fraud Scheme

Two Wayne residents have fled the county and been indicted on federal conspiracy, wire fraud, money laundering and bribery charges, the U.S. Attorney’s Office said in a press release issued Monday.

The indictment alleges that nine individuals defrauded New York City out of millions of dollars in connection with the development and implementation of CityTime, an initiative to modernize the City’s payroll system. The project was originally supposed to cost $63 million. However, the project has cost the City more than $600 million to date.

Residents Padma and Reddy Allen, owners of TechnoDyne LLC, allegedly received more than $400 million in fees the company received in connection with the scheme.

The pair moved back to India while the federal investigation into the scheme took place. A phone number listed on TechnoDyne's Web site was busy Tuesday morning.

The indictment also alleges TechnoDyne paid kickbacks to Gerard Denault, who was responsible for selecting and overseeing subcontractors hired by Science Applications International Corporation (SAIC), the project’s primary contractor.

Wayne-based TechnoDyne provides companies with “strategic technological solutions”, according to the company’s Web site.

According to the indictment, the Allens paid Denault and Carl Bell, a chief systems engineer with SAIC $5 for every hour worked by every consultant hired by or through TechnoDyne.

TechnoDyne allegedly took steps to conceal the kickbacks. According to the release, they would wire the funds to bank accounts they controlled in India in the name of other companies affiliated with TechnoDyne, who would then wire the money into bank accounts Denault and Bell created.

The Allens are also charged with obstructing justice in connection with the scheme for lying to law enforcement by the kickback scheme. They allegedly created a phony cover story for Bell to use if questioned about the kickbacks and leaving the country and moving to India at a time when they knew they were under federal investigation.

Padma Allen was honored as an Entrepreneur of the Year by a prominent firm in 2010.

The Allens are charged with wire fraud, conspiracy to commit wire fraud and conspiracy to commit bribery, among other charges.  If convicted, they face a maximum of 145 years in prison. Each counts carries a maximum penalty of $250,000 fine, or twice the value of the laundered funds, except the money laundering count, which carries a $500,000 penalty, or twice the value of the laundered funds.

“As alleged, CityTime served as a vehicle for an unprecedented fraud, which appears to have metastasized over time,” said Manhattan U.S. Attorney Preet Bharara in the release. “We will continue to aggressively investigate the CityTime project until every criminal participant is brought to justice.”

The prosecution is being handled by the U.S. Attorney Office’s Public Corruption Unit.