Former CityTime Consultant Arrested

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    NEWSLETTERS

    The project manager who developed New York City's troubled CityTime payroll system was freed on $1 million bail Friday after he was accused of receiving at least $5 million in kickbacks for his work.

    Gerard Denault, 49, made a brief appearance in U.S. District Court in Manhattan, where he was read his rights before bail was set on charges of wire fraud and wire fraud conspiracy. He was arrested Thursday in Danbury, Conn.

    The government said he received at least $5.6 million in illegal kickbacks in connection with his work as project manager for the information technology project known as CityTime from 2003 to 2010.

    The project was supposed to modernize the payroll system for city employees at a cost of $63 million. It has cost $700 million so far. The city said more than 160,000 workers in 60 city agencies have been added to the payroll system so far.

    Besides financial issues, the project has been delayed by technical problems and union resistance.

    U.S. Attorney Preet Bharara said Denault laundered kickbacks through international shell companies.

    "It is deeply disturbing that while he was hired to help cut costs and save money, in reality, Gerard Denault was allegedly ripping city taxpayers off to pad his own pockets,'' Bharara said in a release.

    Defense lawyer Barry Bohrer said his client expects to be exonerated.

    "This came as a surprise to him,'' Bohrer said of Denault's arrest. "He does feel the product of his work -- the city payroll system -- was a quality state-of-the-art product of which he's proud.''

    Bohrer said Denault is currently unemployed. "He's relieved to be going home and will be devoting his attention to fighting these charges.''

    Authorities have said consultants, including Denault, bilked the city out of $80 million. The arrest follows an indictment returned in February against five others in connection with the CityTime project.

    Those cases are still pending.

    If convicted, Denault faces a maximum of 60 years in prison and millions of dollars in fines.