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Four IT Consultants Charged With $80M NYC Rip-Off
theodp writes "It's I-told-you-so time for Slashdot commenter frnic, who smelled a crime last March after reading that New York City had dropped $722 million on its still-under-development CityTime Attendance System. Nine months later, US Attorney Preet Bharara charged 'four consultants to the New York City Office of Payroll Administration ... for operating a fraudulent scheme that led to the misappropriation of more than $80 million in New York City funds allocated for an information technology project known as "CityTime."' Three of the four consultants were also charged — along with a consultant's wife and mother — with using a network of friends-and-family shell corporations to launder the proceeds of the fraud. Dept. of Investigations Commissioner Rose Gill Hearn called it a shame that 'supposed experts hired and paid well to protect the city's interests were exposed as the fox guarding the hen house.'"
Um, they were charged two weeks ago. It has been all over the local news and even in the ny times back then.
You guys posted this now like it just took place? The timeliness of this site has really gone downhill even with tech news.
It's I-told-you-so time for Slashdot commenter frnic, who smelled a crime last March
So many accusations of criminal behavior are made on Slashdot daily that sooner or later one was bound to be right.
How does something "slip through the cracks" for 7 years?
A project that was $68 million total... instead was $100+ million (a year?!!)
If the city DIDN'T spend MORE-THAN-HALF-A-BILLION maybe they wouldn't be raising the fare on the subway/bus for the 3rd time in just a few years.
Here's a thought.. once a year look at projects and see if they were supposed to be done already. You can pay someone $1,000 a MINUTE to do this and still save money by finding another project like this.
If guilty they should get a Madoff sentence. The person in charge for the city should also go to jail for malfeasance.
...is that everyone does it differently, and no one wants to conform to a uniform system. Why, you might ask? Because the current system is in place and, more importantly, people have learned how to game it.
I went through something like this years ago with a local government t&a project. There was a core group that understood it's value ( namely, IT and payroll ), but everyone else had been using tricks of the current, in place system ( which varied from dept to dept ) to get longer lunches, swap shifts or plain, flat out not work and get paid for it.
We never did get universal buy-in for the project, and it ended up dieing ( although, to be fair, the vendor didn't help things much ). Even in the best of times, T&A is a highly complex subject that almost no one understands. When you have people actively trying to undermine your efforts...well, you can imagine how much progress one might make.
( note: the depts that gave us the most headaches, btw, were fire and police. The "old boy" network had been in place so "billy bob" might take off a couple extra hours because he was the chief's friend. Needless to say, the new time keeping software didn't keep track of that "accurately", and people's feelings got hurt. )
Mod me down with all of your hatred and your journey towards the dark side will be complete!
But that was a corporation. Corporations and their boards never go to jail except in enron-style cases.
And that was a tort, not a crime. Learn the difference. It may save your life.
They're being charged with a crime, and it's 4 guys.
It's different this time. The people are small enough to be crushed without too much effort or revelations of $IMPORTANT_PEOPLE as part of the fraud.
--
BMO
"Jill Hearn -- whose office uncovered the massive scam -- called it a shame that 'supposed experts hired and paid well to protect the city's interests were exposed as the fox guarding the hen house.'"
More like the fox consulting the guy guarding the hen house.
"$80MM"
Is dollars millimeters a new unit?
To be fare, he didn't rape San Francisco of $80 million. He simply highlighted their incompetence.
I'm surprised to see these two companies accused of misbehavior. Especially SAIC which has been around for a long time doing government work in DC.
Also since New York is not a self-sufficient city, but heavily subsidized by the US government, this loss of taxpayer dollars affects all of us. It's obviously worse for New York State residents, but all americans were defrauded on this one.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
There's something deeply ironic about capitalist consultants scamming a city in instituting the labor theory of value for government workers.
"I assumed blithely that there were no elves out there in the darkness"
It can happen whenever the person in a corporation approving projects or supplies is the same one in charge of billing and receiving.
You can say CompanyA bought x from MegaCorp. Turns out MegaCorp is owned by someone else in CompanyA and all the paperwork checks out fine.
It shows the needs for controls. Many white collar crimes do these sorts of things as it is much easier not to get caught then insider trading or physically stealing something.
http://saveie6.com/
lol yeah I'm sure you would each make trillions of NY-bucks trading each other fraudulent derivatives in hobo urine futures.
"I assumed blithely that there were no elves out there in the darkness"
its not different this time. your points are valid, but claiming this is 'new' is wrong,
they never would have been prosecuted at all if someone hadn't been determined to try to right all the wrongs again, and managed to find this group.
https://www.gnu.org/philosophy/free-sw.html
What's slightly depressing is that the comment scored only 1. Of course, this was probably because it was (rightly) modded down by the spelling and grammar police.
As said In some comment above: with projects like these, it's all about problems at ISO-layer 8 + 9. the software is usually your least concern.
Windows 2000 - from the guys who brought us edlin
I didn't claim it's new. I said "this time." Don't put words in my mouth.
While you pulled me into an argument about semantics, you're wrong. Learn to read.
--
BMO
These large consulting firms like SAIC suck all the oxygen out of the room in overhead and are prime contractors for one mega software disaster after another. If I were contracting a project like this out I would want to see a working system of anything remotely resembling the project up and running with test data.
If the consultancy can't demonstrate a running project of similar scope, complexity, and scaling, then it is a mistake to choose them to do your project. If they can demonstrate it, then a shell of the system minus proprietary screen details and business logic should be put in place and source provided, and a clean build done with the source code, as a condition of startng the project and initial payments.
As far as I can tell, this sort of start is rarely done and these large consulting forms drain the entire budget with non-technical people before ever starting, minus purchases for new hardware which is always cited as a major project achievement but consists of nothing more than buying computers and hardware and setting them up.
In addition, I think it's a major mistake to start out a project as "web based" or before that "client server". As we programmers know, it should be interface independent. I know that sounds naive and theoretical, but we know that the complexity is in the business logic and developing a system that computes what the business needs, even if sometimes we don't all figure that out until we take a pass at it and compare test results with the users and realize that the users missed something or we misinterpreted something or usually both. In any event, iterating through test cycles fleshes that out.
That is most important and has little to do with the interface in some respects. Of course the interface can be a major source of misinterpretation but it shouldn't be in the beginning. The development should be with data passed with message queues, sockets, and the like initially and the interface only enough to fill in and display in/out data structures, result set arrays, etc.
A shell template of the process, which admittedly even at that minimal level is a large and important endeavor, needs to be developed with specific calculation procedures to be filled in later, a large 80-80 dump system if you will speaking old school. This fleshes out so much need and clarifies specifications that have nothing to do with whether it's "web based" that all that should be solid, and then the calculations firmed up and solid test results attained, before anything is done on interface screens, in this case web pages.
I wrote a back end for a full featured jobs site for a consulting firm in 2000 on the AS/400 iseries and quite frankly I tested all the API calls with 5250 screens via data queues (message queues) before calling from web pages. I wrote the complete back end in three months and we did the entire jobs site in a little more than that, about four months, just two people. Web pages were delivered in a few milliseconds, performance was very good.
Now I didn't have anything to do with the business end of it and it was only up a year or so before the consulting company and business partners parted ways, but it worked very well and in my opinion had just about all the features of the job boards at the time, but that's not the entire point here. The point is the backend server was oriented to our planned web pages in some respect but developing it and getting it right exposes any problems early on until it produces output to specifications.
After that, interfaces can be as complex and helpful as one wants to make them but they don't make a system complex because it is "web based". Of course the backend has to be written stateless with that in mind, providing whatever methodology to restore state as needed for each transaction.
With all of this, I would structure contracts to meet objectives in that order at certain time / cost milestones before authorizing next phase. If we did that, we would not necessarily make all these huge software projects
>>>If NYC were to break off of the union and become an independent free city
They would quickly bankrupt themselves. And companies that are currently receiving huge US subsidies to set-up shop in NYC, would no longer get those handouts, and move somewhere else like Philly or Boston. In short order NYC would resemble Rome City after there was no longer an empire to support it (services collapsed, people fled the city, and its population plummeted from 5 million to 100,000).
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Deloitte hit with $30M lawsuit over ERP project [computerworld.com]
My favourite part from that link is :
"The 38-page complaint alleges that Deloitte was lying when the company promised to assemble a team of its "best resources" for the project and when it claimed to have "deep SAP and public sector knowledge" when marketing itself to the county."
How naive are the folks at Marin county? In my experience, every single consulting firm in existence lies about the team they're going to place on a project. I have seen some utterly staggering misrepresentations.
If libertarians are so opposed to effective government, why don't they all move to Somalia?
$722m to develop a time-and-attendance system? And it's not operational? And the people in charge - if indeed anyone was ever really in charge, which I highly doubt - have not been at least been fired long ago? The whole situation is a scam of huge proportions. I'm amazed only $80m has been attributed to fraud - so far.
The NYC economy is basically trading on the perceived worth and futures of the products from unimportant hicktowns.
There's some added cash-flow paying for 'teh pretty lites' and charging fees to movie studios cos you're that important.
Remind us what the last actual product from NYC was?
If they actually pulled $80MM out between them, that's $20MM each. That's money that allows you to disappear, to buy a house on a beach in Thailand or Costa Rica and never work or care again--or if you hunger for civilization, to construct a new identity that creates a totally clean break with the theft.
Why the fuck would you stick around after stealing $20MM?
Anyone who loves or hates any language, platform, or manufacturer, doesn't know what they're talking about.
The people who live in NY State outside of NYC would love to see NYC break off and float away.
Having done this for a decade for private and public sectors, I disagree. ISO layer 8 or 9 means nothing to me and reveals nothing in a search(of course OSI layer 8 is the unofficial idiot user layer). The problem with custom software of this magnitude is that the entity is not forced to examine anything they do, they just demand and expect the system that replaces whatever they have to work just like the old one. Say your old system is running on PICK(which can be common with very old systems, ADP has been using it for various accounting and payroll related software packages since the early 80s at least). There are very few Windows or Unix based equivalents in today's world and you can be damn sure than 99.9% of major IT contracting houses have no idea how to develop for it(do you know DataBASIC? ENGLISH?) or how to make a relational database work in the same manner(they don't). In the end, the software IS the concern because these entities are asking for the software to do things that are completely arcane(such as needing it to print paychecks on a fleet of 30 year old impact printers that have limited driver support, no real API to integrate into modern development suites, etc) rather than completely overhauling everything from the ground up to completely modernize. In the end, stop going for custom solutions, because you shouldn't need to hire a bunch of retired aerospace engineers to program your software because they're the only people that know the language
What does T&A mean in this context? All I can really get from your post is payroll. I'm betting it is not the traditional English use as in "tits and arse" that would keep it out of any serious use in Britain, Australia, Canada etc.
For most people in government, that is worse than stealing the $80 million.
Bother, said Pooh, as he called in an air strike.
Comment removed based on user account deletion
...is that everyone does it differently, and no one wants to conform to a uniform system. Why, you might ask? Because the current system is in place and, more importantly, people have learned how to game it.
I went through something like this years ago with a local government t&a project. There was a core group that understood it's value ( namely, IT and payroll ), but everyone else had been using tricks of the current, in place system ( which varied from dept to dept ) to get longer lunches, swap shifts or plain, flat out not work and get paid for it.
We never did get universal buy-in for the project, and it ended up dieing ( although, to be fair, the vendor didn't help things much ). Even in the best of times, T&A is a highly complex subject that almost no one understands. When you have people actively trying to undermine your efforts...well, you can imagine how much progress one might make.
( note: the depts that gave us the most headaches, btw, were fire and police. The "old boy" network had been in place so "billy bob" might take off a couple extra hours because he was the chief's friend. Needless to say, the new time keeping software didn't keep track of that "accurately", and people's feelings got hurt. )
The second most important single document in project management - the stakeholders list.
The most misunderstood term in project management - stakeholder.
Stakeholder == anyone who might possibly want to stab you with a pointy stick.
Most important document - a list of motivations and pain points of the stakeholders. Third most important - payment terms. Fourth - project delivery specifications.
Feel free to disagree, and, good luck.
;-p
OK, so $80M is accounted for, where's the rest?
WP says NYC employs a quarter million people - some fraction of those are hourly.
This project should be priced closer to $10/head, not $5000.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Bah, getting hit with a lawsuit tells nothing of the real story, I was part of a consulting project once where they at least considered it. My most vivid moment from that project was a fairly critical workshop I held, the topic was well announced, the entire core team of the customer was present and if they at any time needed assistance it was their task to call inn additional resources. At the first semi-hard question of the workshop their project lead said they didn't have the competence present to decide that now. I seriously just wanted to just abort the whole workshop right then and there, like seriously? wtf? There was almost ten people around the table and if you can't even decide this one, how the hell are we going to get anything done? Even get through the day? As expected essentially nothing got decided, extra meetings were scheduled, the project mostly stalled as they ran in circles and demanded extra workshops to explain things we've already explained but they still couldn't decide on and eventually the project was killed from upon high as it was way over budget.
Of course they wanted to nail us to the wall to recover some of that money but I think they just looked at the mass of documentation we had they had failed their end of the contract and decided to let it go. To make a car analogy consultants are a bit like taxi drivers, if you can't really make up your mind on where you're going we're happy to drive you around as long as the meter is running. You can't just at the end say "oh we started at A and ended at B, that's way too much for that distance" when in the beginning you just had a general direction and couldn't decide if we were at the right place or not and asked us to just drive around looking for it. If we're to do a good job, we need the requirements up front not one by one as we fail them. If you ask me to drive you to a good restaurant, telling me in front of the steakhouse that you wanted a sushi place (or vice versa) is too damn late. We know the tools we're implementing, but you're supposed to know the business you're in. Sometimes I really got them impression they wanted us to learn them how to do their job too...
Live today, because you never know what tomorrow brings
But what you describe looks like an ISO layer 8 + 9 problem to me. People and organizations that somehow want "more modern" software but do not want to change their workflows. Such a project is almost guarranteed to fail IMO.
Windows 2000 - from the guys who brought us edlin
And perhaps if they got called on it more often they wouldn't be so fast to lie.
I suspect that almost all people who live in the USA outside of NYC would love to see NYC break off and float away.
General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
They can't fire them because they never turn up. At least that's what the system says...
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Hmm, I also called it ... http://news.slashdot.org/comments.pl?sid=1597606&cid=31639800 .. looked pretty obvious.
To be fare, he didn't rape San Francisco of $80 million. He simply highlighted their incompetence.
By being a dickbag, as GP said.
To have a right to do a thing is not at all the same as to be right in doing it