Schenectady County

Latham man pleads guilty in minority-owned business scam

Michael Martin gets up to 12 years in prison

SCHENECTADY — A Latham man who pleaded guilty to defrauding two minority-owned businesses in order to obtain millions of dollars in public contracts and failing to properly pay more than 50 employees was sentenced to up to 12 years in prison on Friday.

Michael Martin, 47, stood before Schenectady County Court Judge Matthew Sypniewski, who handed down the sentence requiring Martin to serve 3 ½ to 12 years in prison.

Martin spoke before his sentencing, expressing remorse for his actions.

“First and foremost, I’d like to apologize to the victims involved,” Martin said. “It was never my intent to take advantage of anyone.”

He continued to apologize to the court for wasting its time and money on the case, as well as his family for causing them any pain.

Martin then asked for leniency by being placed in the shock incarceration program, an intensive, boot-camp program and an alternative to prison.

Sypniewski quickly dismissed Martin’s request and said he wasn’t recommending him for the program.

“You should have stopped at ‘I’d like to apologize,’ because anything after that is disingenuous or misrepresented,” Sypniewski said. “You said you didn’t want to take advantage of anyone, but that’s exactly what you pleaded guilty to doing. For me to remind you of that it’s just, well, it represents to me you have really no insight and accountability for your actions.”

Sypniewski later went on to say that Martin will “deserve each and every day” he is in prison.

Martin, along with Scott Henzel, 52, of Albany were accused in July of stealing the identities of two minority-owned businesses — Precision Environmental Solutions and Lorice Enterprises — and using them to win public construction contracts.

The two originally offered to help the two companies by partnering with them and showing them successful operating and business tactics, according to a press release from the state Attorney General’s Office.

They did this through the now-defunct Eastern Building & Restoration Inc, a general contractor located in Albany. Martin served as the president and owner of the former company, while Henzel was the comptroller from 2004 until 2014.

Officials said the two men used the two minority-owned businesses to rake in millions of dollars in public works projects through public contracts awarded to their company. State law requires that a portion of those fund be awarded to the minority contractors, according to the release.

In reality, they took over the two companies and managed their day-to-day business. This included the staffing of laborers and making bidding decisions, and managing banking activity and financial decisions, according to the release.

This resulted in the two companies no longer being minority-owned businesses.

The scheme lasted between April 2012 and September 2015, according to the state inspector general.

Through the money obtained through the scheme, officials said Martin spent more than $1 million on items such as Harley Davidson motorcycles, snowmobiles, trailers, jets skis and off-road vehicles by using corporate credit cards.

Martin pleaded guilty in October in Schenectady County Court to felony second-degree grand larceny for stealing more than $150,000 from a minority-and-women owned business, Precision Environmental Solutions, according to a press release from the state Attorney General’s Office. 

He did this by funneling more than $9,000 a month as part of a fake rental agreement to a fake company that Martin owned, according to the release.

This occurred all while Precision was already paying $1,800 in rent to their actual landlord, according to the release.

Martin also filed a false insurance claim on behalf of that company for more than $200,000 from the Allegheny Casualty insurance company, according to the release.

Martin and Henzel also failed to pay more than 50 laborers the $6 per hour in pension funds, which they were required to pay as part of their prevailing wage. They also underpaid more than $400,000 in pension benefits, which included $100,000 on a contract with the state Dormitory Authority.

According to the release, they covered up their crimes by issuing false pay stubs to employees and falsified public works project documents to make it seem like the payments had been made.

Martin also pleaded guilty in October to felony first-degree scheme to defraud in Albany County for defrauding employees of his former company, Eastern Building & Restoration, contracting agencies and insurance companies, according to the release.

This guilty plea carries a potential sentence of 1 to 3 years in prison, which will run concurrently with the sentence he received in Schenectady County.

Martin is scheduled to be sentenced in that case on Monday before Albany County Court Judge Peter Lynch.

As part of his guilty pleas, Martin must pay a total of $800,000 to his victims.

Henzel pleaded guilty in November to a felony charge of failure to pay the prevailing rate of wage or supplements over $100,000. He is scheduled to be sentenced on Jan. 8. He will be forced to pay $70,000 to his victims as part of his plea.

Molain Gilmore, owner of Precision Environmental Solutions, spoke before Martin was sentenced on Friday. 

She told the court the impact of Martin’s actions, saying she can’t afford a car, even after she had been driving for 47 years, and had nearly lost her home.

Still, Gilmore said she had no ill will toward Martin.

“He’s a young person who has a chance to turn over and do something different,” Gilmore said. “To treat people different.”

After hearing what Martin had to say Sypniewski, she didn’t change her mind, citing her relationship with her church, Refreshing Spring Church of God in Christ.

“Therefore, I’ve got to do this,” Gilmore said. “I’ve got to believe it.”

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