DOJ Busts 70 NYC Employees For Taking Millions in Kickbacks

Bob Van Voris
·2 min read
8

(Bloomberg) -- US prosecutors accused 70 current and former workers with New York City’s public housing program of a widespread kickback scheme across almost 100 developments.

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New York City Housing Authority building superintendents and assistants in every borough forced contractors to pay $2 million for access to $13 million in no-bid contracts for maintenance work, prosecutors said Tuesday. Of the 70 charged, 66 were arrested this morning in what prosecutors said was the biggest federal bribery case made in a single day.

“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,” said Damian Williams, US Attorney for the Southern District of New York.

The employees were all suspended Tuesday. Those arrested were expected to answer charges in court later in the day.

Prosecutors said the NYCHA employees typically demanded kickbacks of 10% to 20% of contracts that were under $10,000 and didn’t require competitive bidding. In one case, a woman employed as a caretaker at Polo Grounds Towers, a development in northern Manhattan, threatened to cut off access to work if kickbacks weren’t forthcoming.

“I’m about to cut you off,” she allegedly said in a text message to a contractor, who is cooperating with the authorities.

In another case, a former housing manager at Brooklyn’s Farragut Houses was asked by a superintendent at Douglass Houses if a payment of $1,000 per no-bid purchase order contract was “cool” — to which she allegedly replied “No problem babe.”

New York manages 335 public housing developments throughout the city, housing one out of every 17 New Yorkers, according to the government. The city receives $1.5 billion in federal funding from the US Department of Housing and Urban Development every year.

In a press conference to announce the charges, Williams touted a pilot whistleblower program announced last month that’s designed to encourage people to disclose wrongdoing to his office in exchange for the possibility of avoiding prosecution.

(Updates with details of charges in fourth paragraph.)

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