Con Edison contractor arrested in $6.9 million bribery and kickback scheme

NEW YORK — Federal agents arrested the Chief Executive Officer of Rudell & Associates, Inc., today for allegedly providing more than $6.9 million in bribes and kickbacks to supervisors of Consolidated Edison of New York (Con Ed). The arrest follows an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations’ (HSI), the Internal Revenue Service, Criminal Investigation (IRS-CI), The Port Authority of New York and New Jersey, Office of the Inspector General. 

Rodolfo Quiambao, 71, of Queens, New York allegedly bribed Con Ed supervisors in exchange for receiving lucrative contracts from the public utility services provider.  Quiambao’s arrest is the latest part of the government’s continuing investigation of bribery and kickback schemes involving employees of Con Ed. In January 2009, ten Con Ed supervisors and one employee were charged with collectively receiving more than $1 million in kickbacks from contractors; all eleven later plead guilty to federal offenses. 

“For more than a decade, Rodolfo Quiambao allegedly played dirty to make sure he received the contracts, and millions of dollars, that he wanted. And, ordinary New Yorkers, who rely on Con Ed for electricity, gas, and steam, bore the costs,” stated Kelly T. Currie, acting United States Attorney for the Eastern District of New York.

“Like any other purchaser of goods or services, Con Ed customers expect to pay fair rates for their utilities. Customers ultimately pay for corrupt bidding practices in the form of higher prices, or in the case of utilities, higher rates,” said Shantelle P. Kitchen, special agent in charge IRS-CI. “Just as IRS Criminal Investigation is committed to ensuring that everyone pays their fair share of taxes, we will work with our law enforcement partners on bribery and kickback scheme investigations, sharing our financial investigative expertise to ensure that businesses play fairly and that customers get what they pay for.” 

“The conduct charged against Quiambao, the subject in today’s announcement, is egregious in its nature, duration, and its scope. Further, the conduct was particularly brazen in that he allegedly took steps to hide his scheme, and yet continue the scheme, even while others were arrested in this investigation,” said Michael Nestor, inspector general of the Port Authority. “The Port Authority Inspector General will continue to work cooperatively with its law enforcement partners to root out systematic corruption in the construction industry,” stated Inspector General Nestor of The Port Authority.”

As alleged in the criminal complaint unsealed today, for over a decade beginning in as early as 2000, Quiambao, whose company specializes in electrical design, surreptitiously and regularly provided three Con Ed supervisors with over $6.9 million in cash and checks in exchange for securing contracting work for his company.

From at least 2007 to 2011, Quiambao – acting through his company, Rudell – allegedly provided over $6.5 million in checks to a company owned by a Con Ed Section Manager who oversaw various projects within Con Ed’s Electrical/Controls Systems Design section. In 2007 and 2008, Rudell issued approximately 120 checks to the Section Manager’s company, totaling approximately $2.7 million.

Beginning in January 2009 – after the announcement of the arrests of Con Ed supervisors for taking kickbacks – Quiambao is alleged to have attempted to conceal his illegal payments, instead issuing checks from Rudell to Rudicon Power Corp. (Rudicon), another company that Quiambao owned and which did no work for Con Ed, and then issuing checks from Rudicon to the Section Manager’s company in the same amount as the checks from Rudell to Rudicon. Throughout 2009 and 2010, Rudicon paid the Section Manager’s company approximately $3.7 million in some 146 checks. The memo lines of the Rudell to Rudicon checks, and the corresponding Rudicon to the Section Manager’s company checks, often listed the same Con Ed project.

Throughout the same years, the Section Manager steered Con Ed work to Rudell, supported the awarding of lucrative Con Ed contracts to Rudell, and reviewed and authorized payments to Rudell under those contracts. During this time period, Rudell received approximately $30 million in payments from Con Ed that were approved by the Section Manager.

The complaint also alleges that, from approximately 2003 to 2010, Quiambao provided approximately $200,000 in cash kickbacks to a Con Ed Section Manager in the Construction Public Improvement (CPI) unit. The CPI Section Manager oversaw engineering construction projects and had influence over the awarding of contracts to outside contractors like Rudell. Approximately once per month or every two months, Quiambao provided the CPI Section Manager with an envelope of cash. In exchange, the CPI Section Manager reviewed, edited, and provided advice regarding Rudell’s bid proposals before Rudell submitted them to Con Ed. The CPI Section Manager also steered Con Ed work to Rudell and supported the awarding of “sole source” contracts to Rudell.

The complaint further alleges that, from approximately 2000 to 2010, Quiambao provided at least $240,000 in kickbacks to a Con Ed Engineering Supervisor in the Mapping Department. During that time period, Rudell was awarded numerous Mapping Department contracts in the amount of approximately $6.9 million. Approximately once per month, Quiambao gave the Engineering Supervisor checks from Rudell – and, after the January 2009 arrests, from Rudicon, which had received the same amounts from Rudell – made out to a company owned by the Engineering Supervisor and which Quiambao had suggested and assisted in setting up to facilitate the illegal payments. Consistent with the defendant’s modus operandi, the memo lines of the Rudell to Rudicon checks, and the corresponding Rudicon to the Engineering Supervisor’s company checks, often listed the same Con Ed projects, projects which were supervised by the Engineering Supervisor. The Engineering Supervisor steered Con Ed projects to Rudell, supported the awarding of sole source contracts to Rudell, and recommended Rudell to other Con Ed employees.

If convicted, Quiambao faces a maximum sentence of ten years’ imprisonment and a $250,000 fine.