In the largest number of federal bribery charges brought on a single day in the U.S. Department of Justice history, 70 current and former employees of the New York City Housing Authority (NYCHA), including eight from The Bronx, have been charged with allegedly accepting cash payments from contractors in exchange for awarding NYCHA contracts at various NYCHA locations across the City.

 

Federal and City officials made the announcement on Tuesday, Feb. 6. They included Damian Williams, U.S. Attorney for the Southern District of New York, Jocelyn E. Strauber, commissioner for NYC Department of Investigation (DOI), Ivan J. Arvelo of Homeland Security Investigations (“HSI”); Rae Oliver Davis, with the U.S. Department of Housing and Urban Development (HUD), and Jonathan Mellone with the U.S. Department of Labor.

 

Federal prosecutors said officials unsealed bribery and extortion charges against 70 individuals, 66 of whom were arrested on Tuesday morning in New York, New Jersey, Connecticut, and North Carolina. They said the defendants who were arrested in the New York area were scheduled to appear in Manhattan federal court later on Tuesday.

 

In the context of the announcement, Williams said, “Instead of acting in the interests of NYCHA residents, the City of New York, or taxpayers, the 70 defendants charged today allegedly used their jobs at NYCHA to line their own pockets. This action is the largest single-day bribery takedown in the history of the Justice Department. NYCHA residents deserve better.”

 

He added, “My Office is firmly committed to cleaning up the corruption that has plagued NYCHA for far too long so that its residents can be served with integrity and have the high-quality affordable homes that they deserve.  The culture of corruption at NYCHA ends today.”

 

Federal officials said the 70 defendants include the following eight Bronxites:

• Hector Colon, 45, for solicitation and receipt of a bribe (which carries a maximum sentence of 10 years), and extortion under color of official right (which carries a maximum sentence of 20 years),
• Lateisha Harley, 48, for solicitation and receipt of a bribe (10 years potentially) and extortion under color of official right (20 years potentially),
• Nena Huntley, 36, Bronx, NY, solicitation and receipt of a bribe (10 years potentially), extortion under color of official right (20 years potentially),
• Henry McPhatter, 44, Bronx, NY, solicitation and receipt of a bribe (10 years potentially), extortion under color of official right: (20 years potentially),
• Jorge Perez, 54, Bronx, NY, solicitation and receipt of a bribe (10 years potentially), extortion under color of official right (20 years potentially),
• Curtis Priester, 58, Bronx, NY, solicitation and receipt of a bribe (10 years potentially), extortion under color of official right (20 years potentially),
• Jaime Rivera, 50, Bronx, NY, for solicitation and receipt of a bribe (10 years potentially) and extortion under color of official right (20 years potentially),
• John Rivera, 56, Bronx, NY for solicitation and receipt of a bribe (10 years potentially) and extortion under color of official right (20 years potentially).

 

Among the affected NYCHA complexes located in the north Bronx, according to federal officials, are Gun Hill Houses, Eastchester Gardens, Boston Road Plaza, Pelham Parkway, Twin Parks West, Twin Parks East, and 1010 East 178th Street. They also include Marble Hill. Federal officials said cash payments were accepted on site at these and other NYCHA locations, marked with a red dot on the attached map.

 

For her part, Strauber said, “As charged, these 70 current and former NYCHA supervisors and other staff used their positions of public trust and responsibility to pocket bribes in exchange for doling out no-bid contracts.  The extensive bribery and extortion alleged here calls for significant reforms to NYCHA’s no-bid contracting process, which DOI has recommended and NYCHA has accepted.”

 

She added, “I thank the U.S. Attorney’s Office for the Southern District of New York and our federal law enforcement partners for their commitment to protect scarce public resources intended to maintain public housing, and to hold accountable public servants who abuse their authority, and NYCHA’s senior leadership for its cooperation in this important investigation.”

 

Arvelo said the 70 defendants were accused of demanding kickbacks and bribes for access to no-bid contracts and lucrative, under-the-table deals. “Make no mistake, this alleged pervasive corruption had the biggest impact on NYCHA residents themselves, who may have been cheated out of better services and programs,” he said in part.

 

Meanwhile, Davis said the pay-to-play bribery schemes alleged in the complaints unsealed waste millions of dollars and risk residents staying in unacceptable living conditions. “The alleged conduct identified during this investigation harms the effectiveness of housing programs that support more than 200,000 residents,” he said in part. “It also poses a significant risk to the integrity of the HUD rental assistance programs that support housing assistance in New York City and erodes the trust of NYCHA residents in HUD’s programs.”

 

Mellone said an important part of his department’s mission was to investigate corruption and fraud involving matters within the jurisdiction of the Office of Inspector General. “We are committed to working closely with our law enforcement partners to investigate those who exploit governmental programs and the American workers,” he said.

 

According to the allegations in the complaints and publicly filed documents in these cases, NYCHA is the largest public housing authority in the country, providing housing to 1 in 17 New Yorkers in 335 developments across the City and receiving over $1.5 billion in federal funding from HUD every year.

 

The court heard that when repairs or construction work require the use of outside contractors, services must typically be purchased via a bidding process.  However, at all times relevant to the complaints, when the value of a contract was under a certain threshold (up to $10,000), designated staff at NYCHA developments could hire a contractor of their choosing without soliciting multiple bids. This “no-bid” process was faster than the general NYCHA procurement process, and selection of the contractor required approval of only the designated staff at the development where the work was to be performed.

 

Federal officials said that the defendants, all of whom were NYCHA employees during the time of the relevant conduct, demanded and received cash in exchange for NYCHA contracts by either requiring contractors to pay up front in order to be awarded the contracts or requiring payment after the contractor finished the work and needed a NYCHA employee to sign off on the completed job so the contractor could receive payment from NYCHA.

 

As alleged, the defendants typically demanded approximately 10% to 20% of the contract value—between $500 and $2,000 depending on the size of the contract—but some defendants demanded even higher amounts.  In total, these defendants demanded over $2 million in corrupt payments from contractors in exchange for awarding over $13 million worth of no-bid contracts.  The attached map shows the developments affected by the alleged conduct.

 

Reacting to the announcement, Democratic Congressman Ritchie Torres (NY-15), who represents a large section of the borough stretching from the northwest to the south, issued a statement, saying, “Back in 2019, I was the first elected official to sound the alarm about NYCHA’s lack of oversight over micro contracts and small contracts. The high risk of corruption was glaringly obvious five years ago.”

 

He added, “I am pleased to see SDNY prosecuting those who accepted bribes in exchange for steering micro contracts and small contracts to preferred vendors. Bribery on the part of one or few could be explained away as outliers. But bribery on the part of 60 to 70 NYCHA employees points to a systemic failure of management and oversight at the New York City Housing Authority.”

 

Torres concluded, “I will repeat today the warning that I gave five years ago: ‘the deregulated world of micro contracting is a breeding ground for corruption and influence peddling. NYCHA’s process for administering micro contracts needs to be fundamentally rethought.’”

 

As reported by Norwood News in January 2023, New York City Mayor Eric Adams had previously hailed the City’s PACT program in addressing needed NYCHA upgrades at various NYCHA locations across the city. “We have been clear since Day 1 of this administration that NYCHA residents deserve the same quality of life as every New Yorker, and, in 2022, we delivered results,” said Adams. “

 

He added, “Thanks to the PACT program, more than 76,000 New Yorkers will have safe, high-quality, affordable homes with all the tenant protections of public housing. As we continue to take major steps forward on the Public Housing Preservation Trust, we are giving residents a real menu of options to deliver much-needed repairs while always ensuring residents are at the center of the process.”

 

On Jan. 5, 2023, the mayor, U.S. Department of Housing and Urban Development (HUD) regional administrator, Alicka Ampry-Samuel, and interim New York City Housing Authority (NYCHA) CEO, Lisa Bova-Hiatt, announced that 36,103 apartments, across 137 NYCHA developments, had been renovated, were under construction, or were in the community planning and design process under NYCHA’s Permanent Affordability Commitment Together (PACT) program from its inception through the end of 2022.

 

Once completed, they said the renovations would improve quality of life for more than 76,000 NYCHA residents and address $7.2 billion in capital needs through building upgrades. They added that in 2022, the PACT program drove $2 billion in large-scale improvements for NYCHA residents in 8,531 apartments across 17 developments.

 

As also previously reported by Norwood News, the PACT program transitions housing developments from traditional public housing assistance to what was described as a more stable, federally funded, project-based, Section 8 program, unlocking funding for designated PACT partners (in the private sector) to complete comprehensive repairs. With strong support from Adams and HUD, City officials said PACT was a key tool in the City’s strategy of preserving and upgrading New York City’s aging public housing stock. Photos of 2022 projects are available online.

 

City officials said in January 2023 that through PACT, a total of 22 NYCHA developments had been completely revitalized, and 36 more developments were in the process of being renovated. They said an additional 79 developments were in pre-development, where NYCHA and its PACT partners collaborate with residents to design detailed rehabilitation, property management, and social service plans that meet the needs of each community and ensure they thrive for years to come.

 

Separately, on Monday, Feb. 5, a raid was carried out by the NYPD of NYCHA’s Parkside Housing Project located at 2970 Bronx Park East in the Allerton section of The Bronx in relation to an alleged iphone robbery operation of an international nature which was being orchestrated by a man living at the housing complex. [More to follow.]

 

Anyone who believes they may have information related to bribery, extortion, or any other illegal conduct by NYCHA employees is requested to contact OIGNYCHA@doi.nyc.gov or (212) 306-3356. Federal officials further suggest that anyone who may have been involved in such conduct consider self-disclosing through the SDNY Whistleblower Pilot Program at USANYS.WBP@usdoj.gov.

 

A person arrested and charged with a crime is deemed innocent unless and until convicted in a court of law.

 

Editor’s Note: A previous version of this story incorrectly referenced the date of the announcement of the charges as May. 6.