By Nate Raymond
NEW YORK (Reuters) - A U.S. appeals court on Monday rejected three men's bids to reverse their convictions for lining their own pockets while overhauling New York City's payroll system.
The 2nd U.S. Circuit Court of Appeals in New York upheld the 2013 trial conviction of Mark Mazer, the former manager of the CityTime payroll project, and the convictions of Gerard Denault and Dimitry Aronshtein. Each was sentenced to 20 years in prison.
CityTime aimed to modernize New York City's timekeeping and payroll systems. Launched in 1998 with a $63 million budget, its costs had soared to nearly $700 million by 2011 through what prosecutors called a massive kickback and fraud scheme.
The men raised numerous issues on appeal, including claims that the jury instructions were flawed and arguments by Mazer and Denault that their convictions for committing wire fraud should be reversed.
But the three-judge panel found no error in the jury instructions, and said the wire fraud convictions were based on "sufficient evidence that the city did not receive the benefit of its bargain."
Barry Bohrer, a lawyer for Denault, 54, said he was reviewing the decision. Lawyers for Mazer, 52, and Aronshtein, 55, did not immediately respond to requests for comment.
Prosecutors said Denault, a former employee at contractor Science Applications International Corp, received over $9 million in kickbacks to enable a company, Technodyne LLC, to obtain subcontractor work.
Meanwhile, Mazer, who managed the project, arranged with Denault to have a company controlled by Aronshtein, his uncle, become a subcontractor, prosecutors said.
Mazer steered more than $65 million to Aronshtein's company and $23 million to another firm in exchange for more than $30 million in kickbacks, prosecutors said.
Much of the city's losses were recovered after SAIC agreed in March 2012 to forfeit $500 million as part of a deferred prosecution agreement.
Five other defendants have pleaded guilty to aiding the scheme, including Mazer's wife, mother and cousin. Two others remain at large and are considered fugitives.
The case is U.S. v. Mazer, 2nd U.S. Circuit Court of Appeals, No. 14-1397.
(Reporting by Nate Raymond in New York; Editing by Christian Plumb)