Falls contractor John Gross facing a pair of felony charges in federal court

Local News

June 25, 2011

By Rick Pfeiffer Niagara Gazette The Niagara Gazette Sat Jun 25, 2011, 01:21 PM EDT

NIAGARA FALLS — A Niagara Falls contractor, at the center of a public corruption investigation, has been charged in federal court with mail fraud and evading income taxes.

John Gross was charged on June 10 with single counts of mail fraud and aiding in the preparation of a false tax return. The charges are contained in what is known as a “criminal information” filed with U.S. District Court Judge Richard Arcara.

A spokeswoman for the United States Attorney’s Office declined to comment on the information. Gross’ attorney, Herbert Greenman, did not immediately return a call seeking comment.

Court records indicate that Gross has not yet been arraigned on the charges. A federal law enforcement source told the Gazette no court dates have been set in the case.

A coordinated series of raids by FBI and IRS agents in July 2009 at businesses owned and operated by Gross, and at the City Hall offices of then-Acting Commissioner of Inspections Guy Bax and Chief Plumbing Inspector George Amendola, put the Falls plumber and contractor, with a long and checkered criminal past, back in the crosshairs of federal law enforcement.

An affidavit, from an FBI special agent, said investigators were looking for evidence of criminal activity including tax evasion, extortion, bribery, mail fraud and wire fraud.

The criminal information now filed in federal court in Buffalo accuses Gross of a bid rigging scheme that was designed to win contracts for his business. From 2007 through the date of the July 2009 raids, federal prosecutors charge Gross would submit bids for projects and then have employees of his company submit competing, higher bids, from fake companies.

Those who solicited the bids would then award their work to Gross.

In one instance cited in the criminal information, prosecutors said Gross submitted a bid to do repair work on rooftop heating and air conditioning units at the Summit Park Mall. The units had been damaged in a wind storm.

Employees working for Gross submitted two bids for the work using letterheads from other local contractors that they had obtained. Those bids were each in excess of $87,000.

Gross Contracting then submitted its own bid on the project at less than $80,000. Prosecutors say Gross gave all the bids to a Summit employee who he had done favors for and the employee told his bosses all the bids were legitimate.

An insurance company, covering the damaged mall, then awarded the work contract to Gross.

Prosecutors also charge Gross used a similar scheme to win work at a Goodyear Tire & Rubber Company plant in the Falls.

The second charge in the criminal information claims that Gross failed to report income on his 2007 federal tax return. Specifically, prosecutors charge the Gross would have customers write checks for payments to his son rather than the company, then have employees cash the checks after he endorsed them and have the cash returned to him.

There is no mention in the information of any charges relating to Gross and his relationships with Bax, Amendola and then-Chief Electrical Inspector Peter Butry.

Mayor Paul Dyster placed Bax, Amendola and Butry on leave from their official duties at the time of the FBI raids. Bax has since retired from his job.

While Gross’ companies have long done business with the city, the federal investigation had appeared to focus on regulatory actions by city inspectors that may have benefited the long-time Falls businessman.

Amendola would have had authority to approve the work done by Gross, while Bax would have had control over the permits required to perform the work.

An FBI affidavit suggests that Bax, Amendola and Butry may have received gifts or cash from Gross or may have had otherwise inappropriate relationships with him.

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