NYCHA bust is biggest single-day bribery takedown in DOJ history, officials say

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Wednesday, February 7, 2024
70 NYCHA employees arrested in pay-for-play scam
Jim Dolan has the latest.

NEW YORK (WABC) -- As many as 70 New York City Housing Authority employees were arrested Tuesday in a federal corruption investigation.

U.S. Attorney Damian Williams announced the largest single-day bribery takedown in the history of the Department of Justice.

The alleged conduct started in 2013 and ran until 2023. The defendants have been charged with allegedly accepting cash payments from contractors in exchange for awarding NYCHA contracts.

The dozens of current and former employees of NYCHA demanded $2 million in bribe money from contractors in exchange for giving out more than $13 million in work at NYCHA buildings, officials say. Contractors who failed to pay a kickback were cut out of work, officials say.

Officials announced that superintendents accepting and extorting bribes for contractors had become business as usual, occurring in almost 100 NYCHA buildings across all five boroughs -- nearly 1/3 of all NYCHA buildings.

NYCHA is the largest public housing authority in the country, receiving more than $1.5 billion in federal funding every year. It is home to 1 in 17 New Yorkers.

The 70 defendants are accused of using their jobs to line their own pockets.

Officials say that superintendents and assistant superintendents hold great power in deciding which contractors would receive small contracts for repair or construction work. These contracts were valued at under $10,000 and they involved essential work in NYCHA buildings, like plumbing or building repairs.

The contracts are no bid contracts, as they do not have to go through a competitive bidding contract. Instead, the superintendent or assistant superintendent can choose the contractor.

After the contractor finished the work, the superintendent or assistant superintendent needed to sign off on the work so they could get paid by NYCHA. Instead, they are alleged to have demanded their cut in the form of cash bribes to sign off on or approve the repairs.

Many contactors paid these bribes, because if they didn't, the suspects would give the jobs to someone else, officials say.

Authorities say this conduct became a regular practice that dozens of NYCHA employees engaged in.

"Contractors who paid NYCHA superintendents should not be afraid to come forward and speak out," Williams said. "As the complaint today makes clear, many contractors have been brave enough to tell law enforcement about bribes NYCHA employees demanded of them. Going forward contractors should understand that NYCHA employees should not be asking for a single penny."

Among the complexes were the LaGuardia Houses on the Lower East Side, where residents say repairs were actually made quickly.

"If you file a complaint, like 'My stove isn't working' or 'My fridge isn't working,' they'll actually come and check it out," said one LaGuardia resident.

"It's definitely a rare one compared to the area," said another resident in regard to the swift repairs.

While arrests were made at NYCHA facilities in all five boroughs, a sizable number of them were at the Baisley Park Houses on Foch Boulevard in Jamaica, Queens.

The city's Department of Investigation said the alleged fraud drove up the costs of small repairs, diverted funds and eroded the trust of public housing residents.

The corruption investigation involved the city's Department of Investigation, Homeland Security Investigations and the U.S. Attorney's office in Manhattan.

The U.S. attorney says the investigation is ongoing and there could be more arrests.

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