By Nate Raymond
NEW YORK (Reuters) - Three women pleaded guilty on Wednesday to criminal charges arising out of what prosecutors say was a corrupt New York City payroll project that cost the city more than $600 million.
The three are related to Mark Mazer, a former city consultant who prosecutors say played a central role in the scheme, which involved more than $40 million in kickbacks.
The defendants who pleaded guilty include Svetlana Mazer, Mazer's wife; Larisa Medzon, his mother; and Anna Makovetskaya, a cousin.
The trio also agreed to forfeit $31 million in cash and property, prosecutor Howard Master said at a hearing in U.S. District Court in New York.
"Through lies and subversion, each of these three defendants served as highly paid enablers of an epic fraud against the City of New York," Manhattan U.S. Attorney Preet Bharara said in a statement.
The CityTime payroll project, initiated in a bid to modernize New York City's payroll system, was originally budgeted to cost just $63 million. Instead, costs grew to more than $600 million due to the massive kickback scheme, prosecutors said.
Much of that money has been recovered after SAIC Inc, the primary contractor on the project, agreed in March 2012 to forfeit more than $500 million.
Mark Mazer, who has pleaded not guilty, is scheduled to go on trial September 30 with two other defendants. Two other defendants have pleaded guilty, and another two are considered fugitives and remain at large.
The three who pleaded guilty Wednesday had previously been charged with a count of money laundering conspiracy in connection with helping Mark Mazer conceal $25 million in kickbacks he received in connection with the CityTime payroll project.
Under plea agreements made public Wednesday, the trio instead pleaded guilty to a variety of new charges.
Medzon, 68, admitted that from June 2006 to June 2010 withdrawing $200,000 stemming from the CityTime project in $500 or less increments. Makovetskaya, 42, admitted to making false statements to a bank.
Mazer, 47, pleaded guilty to a charge that she obstructed justice by deliberately not disclosing her interest in the shell companies in response to a city ethic questionnaire in an attempt to impute a federal grand jury investigating the CityTime project.
"Each of the defendants has accepted responsibility for their limited roles," Benjamin Brafman, a lawyer for Medzon, said after proceedings.
Despite so many members of his family pleading guilty, Mark Mazer is not in plea talks and continues to plan to fight the charges, said Gerald Shargel, his lawyer.
"The guilty pleas have no impact whatsoever on our case," Shargel said. "Our position has been and remains the City of New York was not defrauded. The City of New York got exactly what it paid for."
(Reporting by Nate Raymond; Editing by Bob Burgdorfer)