BUFFALO, N.Y. -- In New York, contractors who are hired to do state-funded projects are required to use a certain percentage of women and minority-owned businesses, but one of the contractors has drawn scrutiny from the state for failing to meet the threshold.

When the state brought on Nichter Contruction to do a job at the Buffalo Psychiatric Center in 2015, Nichter brought on McClendon Asphalt Paving to do plumbing and electrical work, meeting the 13 percent minority business participation for the project.

Despite filling paperwork with the state claiming the company would perform that work, it's alleged McClendon's name was the only thing actually used during construction.

"The term we use is a 'pass through.' He passed it through two other subcontractors to do the work at the psychiatric center. So there was no work done at all by the minority-owned enterprise," said New York State Inspector General Leahy Scott. 

It was the company's owner William McClendon that drew the eye of the inspector general to the project. Close to a year ago, he filed a complaint to the state saying Nichter Construction did not pay him for work he didn't actually do.

"We interviewed the subcontractor and he laid out the criminal activity and continued our investigation that led to the arrest and arraignment yesterday," said Scott. 

Christopher Nichter the owner of Nichter Construction, his office manager Angela Quinn and William McClendon have all been charged with offering a false instrument for filing -- a felony that could bar them from any future state work and put them behind bars for one to three years, if convicted.

"If you're not abiding by the rules, not allowing women to be involved in the projects, if you're not letting minorities be involved in the projects, I will find out and I will prosecute you," said Erie County District Attorney John Flynn. 

According to the inspector general, Nichter Construction has done work for the state in the past. When asked if those past jobs are being re-evaluated and if more arrest were on the way, Scott could only say that their investigation was still ongoing.