2 local men accused of exploiting, defrauding minority-owned businesses
Staff report
Friday, October 12, 2018
ALBANY – One of two local men accused of exploiting and defrauding minority-owned businesses in an $800,000 scheme has pleaded guilty and agreed to pay back his victims, Attorney General Barbara Underwood announced Friday.
After pleading guilty to felony grand larceny and scheme to defraud in Schenectady and Albany county courts this week, Michael Martin, 47, of Latham, is expected to receive a sentence of 3 1/2 to 12 years in state prison, Underwood said. He has also agreed to pay back the roughly $800,000 he stole from minority-owned businesses, employees and an insurance company.
Martin and his business partner, 52-year-old Scott Henzel of Albany, were arrested in July following a joint investigation by the Attorney General’s Office, state Inspector General’s Office and the state Labor Department. According to investigators, Martin was the crime’s mastermind.
“The defendant’s elaborate scheme defrauded minority-owned businesses and his own employees – all to game the system for his own benefit. Now he’s facing the consequences,” Underwood said. “My office will continue to prosecute fraudsters that take advantage of New York businesses, workers and taxpayers.”
As part of his plea, Martin admitted that he served as president and owner of Eastern Building & Restoration, a general contractor headquartered in Albany, from 2004 to 2014. Henzel, he said, served as controller.
In those roles, he said, they offered two minority business enterprises – Lorice Enterprises and Precision Environmental Solutions – a chance to partner with Eastern to learn how to successfully run and bid on construction projects. In reality, the pair took over the two businesses, Martin said, managing all day-to-day business activities, including staffing of laborers and bidding decisions, as well as all banking activity and financial decisions.