Federal prosecutors accused the NYCHA superintendents and other workers of demanding cash from contractors in exchange for no-bid contracts. There were at least 70 current or former workers involved in the kickback scheme, lining their pockets to the tune of $2 million, prosecutors said. NBC New York’s Jonathan Dienst and Andrew Siff report.
Dozens of New York City Housing Authority workers and contractors were arrested Tuesday by city and federal investigators in one of the largest public corruption roundups in Justice Department history, according to prosecutors.
About 70 people are charged in connection with varying alleged corruption and kickback schemes that occurred between 2013 and 2023 at NYCHA facilities, Southern District of New York attorney Damian Williams announced. The alleged kickback schemes included construction, maintenance and no-bid contracts for essential services like plumbing at nearly a third of the public housing buildings where "extorting was business as usual."
The investigation spanned over a year and arrests were made in six states and all five boroughs, prosecutors said.
A total of 55 current NYCHA employees and more than a dozen former employees were charged after allegedly demanding more than $2 million in bribe money from contractors in exchange for giving out more than $13 million worth of work. The bribes involved small jobs like plumbing for less than $10,000 each, prosecutors alleged, but building superintendents demanded kickback payments before work could begin.
Williams said it was the largest single-day bribery takedown in Justice Department history. So many NYCHA workers were arrested that federal agents had a bus waiting by to drive them all to court. Others were led to U.S. Marshals vans.
Ivan Arvelo, the Homeland Security Investigations special agent in charge for New York, said that the NYCHA residents "may have been cheated out of better services and programs" due to the "lucrative, under-the-table deals."
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There are 335 NYCHA developments across the city and investigators alleged bribery at almost 100 of them, Williams said as he showed a map of the widespread corruption (below).
More than 300,000 people live in NYCHA buildings, the largest public housing organization in the country.
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Williams encouraged any contractors to report wrongdoings by NYCHA employees to the SDNY Whistleblower Pilot Program at USANYS.WBP@usdoj.gov, adding that many of them have already come forward. "Going forward contractors should understand that NYCHA employees should not be asking for a single penny," he said.
New York City Department of Investigation Commissioner Jocelyn Strauber called on "significant reforms" to the public housing authority's no-bid contracting process, which she said NYCHA has accepted.
“The conduct as alleged drove up the cost of this kind of work and diverted valuable public funds away from public housing and into the pockets of corrupt NYCHA staff," Strauber said. Among the 14 recommendations she made to improve NYCHA: reform the micropurchase process, better oversight, create a centralized office to handle the work authorization, review work outside buildings and superintendents, and prequalified reviews of vendors.
Strauber advised the administration transfer responsibility "from development staff to a centralized procurement unit."
Corruption has been plaguing NYCHA for years and those who suffer the consequences are its residents. In 2021, nine contractors were indicted for allegedly bribing superintendents for small repair contracts. In 2022, scores of NYCHA workers were fired for overtime abuse.
NYC Public Advocate Jumaane Williams has previously recommended that NYCHA track repairs so it can work to manage problems and investigate all substandard repairs with a reliable tracker system. All 335 of the public housing buildings were on the public advocate's 2023 "Landlord Watchlist."
NYCHA Chief Executive Officer Lisa Bova-Hiatt said the accused "betrayed the public trust" and that the agency has zero tolerance for wrongful and illegal activity.
"The individuals allegedly involved in these acts put their greed first and violated the trust of our residents, their fellow NYCHA colleagues and all New Yorkers. These actions are counter to everything we stand for as public servants and will not be tolerated in any form," Bova-Hiatt said in a statement. "In the past five years, NYCHA has achieved many significant milestones, while remaining vigilant to ensure integrity in every area of our work. We have already made transformative changes to our business practices and will continue to do so. We will not allow bad actors to disrupt or undermine our achievements."
Housing and Urban Development Inspector General Rae Oliver Davis said that the alleged pay-to-play schemes "waste millions of dollars and risk residents staying in unacceptable living conditions." Some resident were left wondering if repairs to pipes and other apartment problems were delayed due to the alleged bribery scheme.
"I mean that’s crazy. People put in work orders and wonder why they take so long and they’re taking money," said NYCHA Mo Coulibaly.
