St. Louis Construction Executives Indicted for Alleged Wire Fraud in City Diversity Program Exploitation
Three apartment developers in St. Louis, Sidarth "Sid" Chakraverty, Victor Alston, and Shijing "Poppy" Cao, have been charged with wire fraud. They allegedly faked participation in the city's minority and women-owned business program to get tax incentives for their companies, Big Sur Construction LLC and Lux Living LLC. The indictment includes one count of conspiracy to commit wire fraud and 11 counts of wire fraud, according to the U.S. Attorney's Office.
The developers are accused of working together to falsely boost the involvement of minority and women-owned businesses in two apartment projects. This allowed them to claim large sales tax breaks and property tax reductions, as stated to the U.S. Attorney's Office.
The projects at the center of this indictment are the Chelsea and SoHo apartment developments, for which the City of St. Louis had set participation goals to support businesses owned by women and minorities. For the Chelsea project, the City had granted a tax abatement with the stipulation of 25% Minority Business Enterprise and 5% Women Owned Business Enterprise participation. However, the U.S. Attorney's Office alleges that Big Sur Construction claimed false Women Owned Business Enterprise participation to the tune of approximately $272,393 in materials and labor, while actually using non-Women Owned Business Enterprise companies for the work.
Similarly, for the SoHo project, the defendants have been accused of attributing over $1 million in labor and materials incorrectly to a Women Owned Business Enterprise and engaging in deals with an African American Minority Business Enterprise and a Native American Minority Business Enterprise to misrepresent non-Minority Business Enterprise work. The indictment suggests a pattern where Chakraverty and Alston would offer a percentage markup to minority business owners willing to allow their names to be used to conceal this fraud, as per the U.S. Attorney's Office.
Big Sur Construction and Lux Living received significant benefits as a result of their alleged conduct, including more than a million in exemptions from sales taxes for SoHo and more than half a million for the Chelsea project. However, their projected $7 million SoHo property tax reduction never happened because of St. Louis Development Corporation's investigation. The indictment contains allegations of wire fraud, each of which carries a potential sentence of up to 20 years in prison and a fine of $250,000, as mentioned by the U.S. Attorney's Office.
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