Ex-Albany worker accused of stealing $138,000 for home renovation

ALBANY — A former city employee was charged with grand larceny Thursday after a city woman alleged he swindled her out of $138,000 for construction work he did not complete.

Michael Matteo, 57, was arraigned Thursday afternoon in city criminal court. He was sent to the Albany County jail without bail. It was not immediately clear if he has legal representation.

According to documents reviewed by the Times Union and an interview with the victim, Matteo reportedly used his position as a city employee, combined with promises of grants and rebates, to convince a North Albany family to write him 19 checks over a period of seven months.

Matteo is the former dispatch administrator for the city’s water department. He resigned in July. The investigation began the following month after the homeowner filed a complaint with the city.

The city is also conducting a separate review of the its Lead Service Replacement Program after receiving at least one complaint about potential misuse of resources. As the dispatch administrator, Matteo allegedly was able to guide work for the program to a contractor. David Galin, Mayor Kathy Sheehan’s chief of staff,  said an outside review of the program is ongoing. Matteo has not been charged with wrongdoing related to that review.

When the Times Union previously asked about the allegations in relation to the lead service program in early August, both Sheehan and Water  Commissioner Joseph Coffey said they were not aware of any issues with the program.

The criminal charges Matteo faces raise questions about how much oversight Matteo had at his water department job. Time-stamped text messages reviewed by the Times Union show that Matteo was often arranging to meet with the victim at her home or other locations during normal business hours.

Galin did not respond to questions concerning Matteo’s work for the city.

Investigators believe that between June 21, 2022, and Jan. 11, the victim paid Matteo approximately $138,000 for renovations to a home in Albany that were never completed.

The alleged scam began while the victim, Blanche Fallen, was already reeling from a two-year struggle to rebuild her family home on Mohawk Street.

Fallen and her husband bought the two-family home in 1997. Their home was ruined May 8, 2020, after a neighbor’s grill caught fire and the blaze spread to the Fallens’ home. The city ordered the house demolished, leaving them with facing a long road to rebuild.

The journey got even longer before they met Matteo. The Fallens and their first contractor had a falling out after the family believed he was failing to do the work that was promised. The two sides are currently in litigation.

Then Matteo came along.

Fallen said at first, she thought she had found the person who could fix their problems. He presented himself as a city employee with connections to contractors. He offered to be the project coordinator. He told the family he could do the work within the limited budget of the funds that remained from their insurance to rebuild; knew of rebates they could apply for and could fix existing problems with the half-built home.

Instead, Fallen said, beginning in June 2022, Matteo ran a brazen, months-long scam in which he included his job title as the dispatch administrator for the city water department on every work proposal he presented to her and walked away with nearly all of the money the family had left.

Some of the proposals, in retrospect, seemed too good to be true. In one, Matteo offers to install two full bathrooms, two half bathrooms, two water heaters and copper piping for the entire house for just $10,400, according to documents Fallen shared with the Times Union.

Others were overt overcharges. Matteo charged Fallen $2,200 for a video inspection report of the partially built home to help lay out what needed to be done. The person who shot the video later told Fallen he charged Matteo $700 for the work.

Between June 2022 and January 2023, Fallen wrote Matteo 19 checks.

But a pattern was appearing. Matteo would confirm a date and time to pick up checks or drop off materials but never showed up. According to copies of text messages, Matteo would reschedule dates for work and make excuses when it wasn’t done.

And when Fallen called the water department in April 2023 to see when her new water and sewer line would be put in, she found out there was no record of any work order for her property, nearly a year after Matteo had promised it would be done.

The family is now in tough spot. While they believe they have some funds left from their home insurance, the window to rebuild with that money has likely closed. And of the 13 contractors Fallen has called in for quotes, 12 said they wouldn’t take the job after looking at the quality of work on what little has been built.

Still, Fallen has been relentless in trying to find ways to scrounge up the money necessary to get the job done. She wrote letters to 100 businesses, asking for discounted products or if they could help her in any way. Only four responded.

She asked the city of Albany for help and she said the city put her in touch with someone to help her look for grants. But nearly every grant for homeowners is for rehab work, not building a new home.

At her wits end, Fallen said she’s trying to come up with enough support to hold a tag sale or raffle in early 2024. Her husband worked for the city for years and she says she gave her time freely to help others.

 “I don’t want to call it a handout, but I do need a hand up,” she said.

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