Norwich — A key figure in the major renovation of the Ponemah Mill in Taftville was convicted several years ago on felony state and federal charges in New York City in connection with what the New York police commissioner called “one of the largest cases in the city's history” involving organized crime in both public and privately financed construction projects.

Finbar O'Neill, director of operations for Onekey LLC, pleaded guilty to separate state and federal charges stemming from the three-year investigation into wage-fixing, bribery and allegations of falsified business records in association with the Lucchese crime family from 1997 to 1999.

O'Neill pleaded guilty in 2004 to the state charge of falsifying business records and was sentenced to three years of conditional discharge, five years' probation, five years of government monitoring and a $50,000 fine. He was one of 38 people charged in connection with 11 companies in the state investigation.

In 2009, the FBI handed down 10 indictments, including one against O'Neill, in its investigation into the Carpenters union and the wage-fixing scheme. O'Neill pleaded guilty May 20, 2010, to one count each of conspiracy to make unlawful payments to union representatives and making unlawful payments to union representatives.

He was sentenced Sept. 9, 2011, to serve six months in a residential re-entry facility, five years' probation, a $10,000 fine and was ordered to make restitution payments to the District Council of Carpenters Benefit Funds totaling $112,704.

O'Neill said Thursday he considers his past criminal record to be “in the rear view mirror.” He has made full restitution and is moving on to create a positive legacy going forward, including a pledge to deliver a high-quality development at the Ponemah Mill. O'Neill said he still gets some questions about his past at construction projects, but “not as much anymore.”

“I'm absolutely sure it's over, and I learned a lot not to make any mistakes like that again,” O'Neill said Thursday. “... It's in the rear, and I'm doing what's right for society and for my family. It's one of those things I wish didn't happen, but it did, and we're getting past it.”

According to the federal and state records, the scheme involved eight construction projects, both public and private, including O'Neill's firm, Terra Firma Construction Management and General Contracting LLC. The state indictment said the Lucchese Construction Group, dubbed “a criminal organization” by the New York district attorney, was involved in bid-rigging and wage-fixing schemes that defrauded union workers of wages.

The investigation revealed that contractors billed public entities and private developers as if they had paid the union prevailing wages, but instead bribed top union officials to allow the use of non-union labor at the eight construction sites. Payments also were made to organized crime officials, called the “mob tax” in the indictment, to facilitate the scheme.

The state indictment said O'Neill used associates in the Lucchese crime family to coerce a contractor to remove a lien from a project, paid the so-called “mob tax” and falsified business records to conceal it.

The Ponemah Mill project in Taftville has received two rounds of state funding for the first two phases of construction, including $8.25 million from the Connecticut Housing Finance Authority for the $30 million first phase set to be completed by October, and a $6.1 million loan through the Competitive Housing Assistance for Multifamily Properties (CHAMP) for the $32 million second phase of construction.

O'Neill's conviction and involvement in the New York wage-fixing scheme were known to Connecticut officials who approved state housing loan, according to state Department of Housing spokesman Daniel A. Arsenault.

Arsenault provided email answers to questions posed to state officials by The Day this week on O'Neill's criminal past.

Full disclosure is required on the DOH applications for competitive housing loan, Arsenault said.

O'Neill is not listed as an owner either in Onekey LLC or the mill ownership company, Ponemah Riverbank LLC, Arsenault said. O'Neill's wife,  Paula O'Neill, was listed as the owner and president of Onekey and owner of Ponemah Riverbank. The O'Neills were interviewed together, including “a frank discussion” of the husband's criminal convictions, as part of the state's review of the application, he said.

“The proposal submitted by Ms. O'Neill was strong and ranked among the highest of all the applications reviewed by DOH,” Arsenault said in an email, “and was therefore selected among a pool of applicants.”

Arsenault said the Ponemah project is not subject to prevailing wage laws involving union contractors, but regardless, state officials have strict oversight on the contracts and payment of contractors using the state loan funding at the Ponemah site. While O'Neill describes himself as director of operations, he is not listed as an employee of Ponemah Riverbank LLC, which received the state funding and has not been paid any money through the state loan, Arsenault said.

The state funding provided only enough to fill a gap in financing for the project, with much of the cost funded through other sources, Arsenault said.

Arsenault said all projects funded through DOH undergo strict oversight and frequent on-site and financial inspections to ensure they meet the project budget and state loan requirements as well as quality construction standards.

“For the Ponemah Mills project specifically, construction monitoring includes on-site inspections approximately every two to three weeks and attendance at the general contractor’s job meetings,” Arsenault said. “In connection with this monitoring, DOH receives written reports. Requests for disbursement of funds include all relevant invoices, progress certifications and appropriate lien waivers. All of these materials are in the customary form for the industry and are reviewed by staff before any disbursements are processed.”

DOH funding is allocated incrementally as the project progresses, rather than up front, and any subcontractors selected also are subject to the department's review and must be done in accordance with an approved procurement plan for the project, Arsenault said.

Norwich Mayor Deberey Hinchey said she also was aware of O'Neill's criminal record and considered it irrelevant to the Ponemah Mill project.

“What I see is a man who has invested in Norwich,” Hinchey said. “They have 100 jobs daily over there. People have problems in the past, and I don't believe that affects their ability to go forward in the future. ... All of us need to concentrate on the future.”

Onekey attorney Louis Kaufman has been actively involved in the Norwich project since the firm first expressed interest in the mill nearly 15 years ago. Kaufman said the project has benefited local businesses and workers, including a significant number of small businesses and minority-owned businesses. O'Neill said last week that 6.25 percent of contractors at Ponemah are minority-owned businesses and 25 percent are small business enterprises.

“For us as a company, we are held to a higher standard now, because everyone is looking, and we invite that because we handle ourselves properly,” Kaufman said. “Ponemah Mill would have sat another 30 years if it had not been for Finbar O'Neill. Maybe that is part of his motivation, to create a better legacy.”

c.bessette@theday.com