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70 New York public housing employees took bribes from contractors, US alleges

FILE PHOTO: FILE PHOTO: A generator provides electricity to NYCHA buildings that have no water or heat, following Hurricane Sandy in New York

By Jonathan Allen

NEW YORK (Reuters) - Federal prosecutors charged 70 current and former employees of the New York City Housing Authority, the largest public housing agency in North America, on Tuesday with taking bribes in exchange for awarding no-bid contracts.

Damian Williams, the U.S. attorney in Manhattan, called it "the largest single-day bribery takedown" in the history of the U.S. Department of Justice.

The current and former NYCHA employees, 66 of whom were arrested on Tuesday morning, according to Williams' office, are each charged with extortion as government workers, which carries a maximum sentence of 20 years in prison, and with soliciting and receiving bribes. Some of the accused also face additional conspiracy charges.

NYCHA Chief Executive Officer Lisa Bova-Hiatt said in a statement that her agency, founded nearly 90 years ago to provide affordable homes for New Yorkers, 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," her statement said. "We will not allow bad actors to disrupt or undermine our achievements."

According to the criminal complaint, the defendants, including supervisors, demanded cash from contractors, often for small repair jobs, before they would authorize a contract or sign off on a completed job.

They typically demanded between 10% and 20% of the contract value, pocketing between $500 and $2,000 in a usual deal. In total, they are accused of accepting over $2 million in bribes in exchange for awarding no-bid contracts worth $13 million across about 100 different NYCHA buildings, according to the complaint.

The arrested defendants were due to make an initial appearance in the U.S. District Court in Manhattan on Tuesday.

More than half a million of New York City's 8.8 million residents live in NYCHA housing or receive rental subsidies for apartments in the private market. The authority receives $1.5 billion in annual funding from the U.S. Department of Housing and Urban Development, Williams' office said.

"NYCHA residents deserve better," Williams said in a statement.

(Reporting by Jonathan Allen; Editing by Aurora Ellis)