Nearly two years after the largest single-day federal bribery takedown in the Justice Department’s history, federal prosecutors secured a perfect record on convictions.
All 70 New York City Housing Authority employees swept up in a corruption sweep were convicted, Gothamist reported. Charges ranged from bribery to fraud and extortion.
A vast majority of those charged pleaded guilty to felonies, though 11 pleaded guilty to misdemeanors. Only three took it to trial, all resulting in convictions.
All told, the numerous defendants accepted more than $2.1 million in bribes combined, according to federal prosecutors. In exchange for the payouts, the defendants steered more than $15 million in contracts.
The cash kickbacks ranged from roughly $500 to $2,000, accounting for 10 to 20 percent of any contract’s given value. Payment was often demanded upfront or prior to signing off on work to unlock NYCHA payments.
It all came crashing down in early February 2024 when agents from the city’s Department of Investigation, Homeland Security and the office of the Inspector General for Housing and Urban Development apprehended 66 staffers, including at NYCHA complexes.
The superintendents charged allegedly took advantage of their power in “no-bid” contracts, which are worth below an estimated $10,000 and can be awarded by supers without going through a public bidding process. The policy is designed to accelerate the procurement process on contracts for small repairs and minor construction in public housing.
But it also opens up opportunities for corruption within the country’s largest public housing authority, which is supported by $1.5 billion in annual federal funding.
Despite the 2024 arrests, the problem still persists. Last April, 14 months after the bust, vendors confessed that NYCHA still handed out hundreds of contracts worth a combined $7.8 million to eight companies whose operators have confessed to participating in the kickback scheme.
The defendants will have to pay more than $2.1 million in restitution to the housing authority, as well as $2 million in criminal proceeds. They could also face up to two years in jail, according to Bisnow.
— Holden Walter-Warner
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