REAL ESTATE

70 NYCHA workers charged with bribery and extortion

Dozens of current and former employees of the New York City Housing Authority (NYCHA) were charged on Tuesday with bribery and extortion offenses. As many as 70 superintendents and assistant superintendents at nearly 100 NYCHA buildings allegedly demanded over $2 million in bribery money from contractors collectively in exchange for $13 million in work, according to charges unsealed by the United States Attorney’s Office for the Southern District of New York. According to U.S. Attorney Damian Williams, the action marks the largest single-day bribery takedown in the history of the Justice Department. Williams said 66 of the 70 defendants were arrested this morning.

“Instead of acting in the interests of NYCHA residents, the City of New York, or taxpayers, the 70 defendants charged today allegedly used their jobs at NYCHA to line their own pockets. This action is the largest single-day bribery takedown in the history of the Justice Department. NYCHA residents deserve better,” Williams said.

“My Office is firmly committed to cleaning up the corruption that has plagued NYCHA for far too long so that its residents can be served with integrity and have the high-quality affordable homes that they deserve. The culture of corruption at NYCHA ends today.”

NYCHA is the largest public housing authority in the United States, providing homes for roughly 1 in 17 New Yorkers across 335 developments in the five boroughs. The authority receives more than $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development annually.

When repairs or construction work at NYCHA properties requires the use of outside contractors, the work is usually purchased through a bidding process. However, when the value of the contracts is under a certain amount, typically $10,000, the employees at NYCHA who manage developments can hire a contractor of their choosing without considering multiple bids.

The “no-bid” process requires only the approval of designated NYCHA staff at the development where work is to be done and is faster than the usual procurement process, according to publicly filed case documents.

According to the charges, the supers demanded kickbacks by requiring contractors to pay upfront to obtain the contracts. Or, they required payment after the contractor finished the work and needed an employee to sign off on the job so they could receive their pay from the authority. Many contractors were forced to pay these bribes because if they didn’t, the contracts would be awarded to others.

The defendants typically demanded 10 to 20 percent of the contract value, usually between $500 and $2,000 depending on the size of the contract. In all, the defendants demanded more than $2 million in extorted payments from contractors in exchange for awarding over $13 million in work.

The alleged corruption occurred at nearly 100 NYCHA developments in every borough, accounting for a third of all NYCHA properties.

Those who believe they have information on bribery, extortion, or any illegal conduct by NYCHA staff are encouraged to contact [email protected] or (212)-306-3356. If you were involved in such conduct, consider self-disclosing through the SDNY Whistleblower Pilot Program.

The whistleblower program, the first-ever program of its kind developed by a U.S. Attorney’s Office, is meant to promote voluntary self-disclosure of misconduct and fight corruption within the system. Those who report criminal conduct before the Office finds it on their own will be allowed to enter into a non-prosecution agreement in exchange for their cooperation, according to Williams.

A full list of defendants and the charges brought against them can be found here.

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