(Source: USAO, NY) Preet Bharara, United States Attorney for the Southern District of New York, announced today that ROBERT LEES, a former senior executive of Universal Forest Products, Inc. (“UFP”) was convicted a jury of conspiracy, mail fraud, money laundering and making false statements in a loan application following a seven-day trial in White Plains before United States District Judge Kenneth M. Karas.

Manhattan U.S. Attorney Preet Bharara said: “Today, a jury unanimously found that Robert Lees, a senior executive at Universal Forest Products, participated in a kickback scheme that defrauded both HUD and a mortgage lender.  This verdict should serve as a warning to other corporate executives tempted by fraud.”

The evidence at trial proved that, in or about 2009, Michael Barnett, a real-estate developer, hired JK Scanlan Company, Inc. (“Scanlan”) to be the general contractor on Vineyard Commons, a senior housing community in Ulster County.  In or about 2009, Scanlan entered into falsely inflated contracts with Shawnlee Construction, LLC (“Shawnlee”), a subsidiary of UFP for which LEES had responsibility, to be the subcontractor on Vineyard Commons responsible for framing and rough carpentry.

In or about 2009, a private lender (the “Mortgagor”), agreed to provide financing to Vineyard Commons, which financing would be insured by HUD.  The Mortgagor and the borrower agreed that the proceeds would be disbursed incrementally after the borrower submitted draw requests based upon its completion of phases of the project.

On or about January 19, 2009, Shawnlee provided Scanlan a final bid to supply labor and materials for Vineyard Commons.  In or about March and April 2009, representatives of UFP – including LEES – Shawnlee, and Scanlan entered into an agreement by which...