Federal prosecutors in New York have accused 70 current and former employees of the nation’s largest public housing authority of bribery and extortion for allegedly pocketing more than $2 million in cash payments for no-bid repair contracts.
In what Damian Williams, the US Attorney for the Southern District of New York, called “the largest single-day bribery takedown in the history of the Justice Department,” the scheme involved nearly a third of New York City’s 335 public housing developments – home to one in 17 New Yorkers.
The defendants, arrested in New York, New Jersey, Connecticut, and North Carolina, “allegedly used their jobs at NYCHA to line their own pockets” on no-bid repairs contracts under $10,000, Williams said in a statement Tuesday.
“NYCHA residents deserve better,” Williams said. “The culture of corruption at NYCHA ends today.”
New York City Housing Authority CEO Lisa Bova-Hiatt said in a statement the defendants “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,” she said, adding the agency will cooperate with law enforcement “to rid the Authority of malfeasance.”
The defendants allegedly demanded about 10% to 20% of the contract value, or between $500 and $2,000 depending on the size of the contract, prosecutors said. Some defendants demanded higher amounts. They awarded more than $13 million in faster and smaller no-bid contracts awarded from designated staff at the developments where the work was to be performed.
At least five of the 70 current and former housing authority employees charged Tuesday were involved in bribery and extortion schemes dating to 2013, prosecutors said.
The city’s housing authority – plagued for decades by lead paint hazards, rat infestations, inadequate heating, and broken elevators – receives more than $1.5 billion in federal funding each year.
The charges against the 70 defendants included solicitation and receipt of a bribe, extortion, destruction of evidence, false statements, and conspiracy offenses, according to prosecutors. The developments where the defendants allegedly sought bribes are in all five of the city’s boroughs.
In a statement, New York City Department of Investigation Commissioner Jocelyn Strauber said the city housing authority has agreed to “significant reforms” to its no-bid contracting process as a result of the case.
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