NEW YORK (Reuters) – The leader of New York City’s subway tunnel repair company is being investigated for allegedly stealing a multimillion-dollar contract and allegedly failing to report it to the city, sources told Reuters.

The revelation comes a week after a federal grand jury indicted the president of the company, Daniel J. Smith, on charges that he used his power to extort a $500,000 settlement from a city employee, who said he was paid $200,000 to keep quiet about a contract he had to sign.

Smith’s attorney denied the charges on Thursday.

The New York State Attorney General’s office said it was investigating Smith and other members of the tunnel repair and maintenance company for alleged financial mismanagement and other violations.

It said it had requested the investigation be closed pending a decision on whether to bring criminal charges.

“The city is committed to ensuring that all of our employees and contractors are protected and that the safety of our citizens is not compromised,” a city spokesperson said in a statement.