Liaquat Cheema, president of AFL Construction Co. Inc., was sentenced to four years in prison for his role in a scheme that defrauded New York City through contracts connected to homeless shelters. The sentencing took place before U.S. District Judge Lorna G. Schofield, following Cheema’s guilty plea to conspiracy to commit wire fraud earlier this year.
According to the U.S. Attorney for the Southern District of New York, Jay Clayton, “Liaquat Cheema stole millions of dollars in public funds intended to pay for maintenance at homeless shelters in New York City. This Office has no tolerance for those who use public contracts intended to aid members of our society-in-need to fraudulently enrich themselves. We will aggressively pursue anyone who abuses public trust for personal profit.”
Cheema led AFL Construction Co., based in Queens, which held approximately $12 million in city contracts for general contracting work at homeless shelters across New York City, including sites within the Southern District of New York. These contracts required services such as general maintenance, landscaping, roofing, and snow removal.
Between 2014 and 2017, Cheema and others submitted fraudulent invoices and documentation as part of their requests for payment on these contracts. The documents falsely claimed that certain workers had performed work and inflated the costs paid for materials. Some invoices included unauthorized use of individuals’ identities—names and even Social Security numbers—of people who did not actually work on the projects referenced.
In addition to defrauding city contracts, Cheema also acquired tens of thousands of dollars in Medicaid benefits by submitting false certifications that underreported income levels. The fraudulent applications included employment letters signed by a purported project manager who was deceased at the time they were filed. As part of his plea agreement, Cheema agreed to repay money improperly obtained from Medicaid.
Alongside his prison sentence, Cheema received two years of supervised release and must pay restitution and forfeiture totaling $3,267,811.
U.S. Attorney Clayton recognized the investigative efforts by both the U.S. Department of Labor Office of Inspector General and the New York City Department of Investigation.
The prosecution was managed by Assistant U.S. Attorney Timothy V. Capozzi from the Complex Frauds and Cybercrime Unit.
