Posted on: February 23, 2022, 02:44h.
Last updated on: February 23, 2022, 04:44h.
Tioga Downs officials and contractors are accused of gaming the system during the harness racetrack’s redevelopment into a racino back in 2016.
Officials at the upstate casino improperly claimed almost $3 million in MWBE utilization credit by “hiring” the Milray Food Company, a business without a functioning website, according to New York State Inspector General Lucy Lang.
While it was certified as a minority-owned business in New York State, Milray was in fact operated by one individual from her home in New Jersey.
Meanwhile, food was actually supplied by two companies that were not MWBE certified.
The MWBE (Minority/Women-owned Business Enterprises) program is designed to promote the inclusion of businesses owned by women and minorities in state contracts.
Projects that hit state quotas can apply for grants, awards, and other benefits. And because casinos are regulated by the state, the Tioga Downs redevelopment was considered a state project.
But some of the minority business purportedly hired as suppliers were fronts for white-owned business that ultimately fulfilled the contracts. The inspector general labeled the ploy a “pass-through scheme.”
Her allegations were outlined in letters sent last week to the New York State Gaming Commission and the state economic development agency, Empire State Development.
Lang said that in the Milray case, all parties were aware of the improper arrangement. Emails showed that Tioga Downs officials had asked the actual service providers to invoice through Milray “so that they can hit the NY state mandated sales percent of MWBE.”
In another instance, a non-MWBE certified company, Macto Electric, was hired to complete $900,000 of electrical work. On paper, it contracted MWBE-certified BSV Metal Finishers to supply the necessary electrical goods. But according to the inspector general, these were actually supplied by a different company that did not have certification.
Meanwhile, BSV pocketed $34,074 for doing nothing, according to Lang.
By misrepresenting and enlisting minority- and women-owned subcontractors to act as pass-throughs in order to meet MWBE utilization rates, these contractors potentially undermined our state’s goal to provide an even playing field in industries where these populations are under-represented,” Aries Dela Cruz, spokesperson for the inspector general, told The Buffalo News.
No charges have yet been brought in the case.
Tioga Downs owner Jeff Gural told The Buffalo News that he had not been aware of the scheme and “no one who still works for me had anything to do with [it].” The manager who handled food distribution has since left the company, he added.
“Integrity is very important to me, so I’m very disappointed,” Gural said.