All 70 employees of the New York City Housing Authority who were arrested and charged in February 2024 for bribery, fraud and extortion were convicted, prosecutors announced on Tuesday.
Of the 70 defendants charged with accepting bribes in exchange for awarding NYCHA repair contracts, three defendants were convicted after jury trials, 56 defendants pled guilty to felony offenses, and 11 defendants pled guilty to misdemeanor offenses, according to Jay Clayton, United States Attorney for the Southern District of New York.
The defendants were collectively responsible for accepting over $2.1 million in bribes in exchange for awarding NYCHA contracts worth over $15 million. As a result of the convictions, the defendants will collectively pay over $2.1 million in restitution to NYCHA and will forfeit over $2 million in criminal proceeds.
"Today’s plea of the 70th and final NYCHA pay-for-play contracting scheme defendant marks an important milestone in one of the largest single-day corruption cases in the history of the Justice Department,” Clayton said in a statement. "NYCHA residents deserve better. New Yorkers deserve better. This broad and swift action demonstrates our Office’s commitment to combating corruption in our nation’s largest public housing authority—home to 1 in every 17 New York City residents.”
The charges stem from contractors hired to fix buildings in NYCHA, the largest public housing authority in the country, which receives over $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development every year. The corruption spread through 365 developments in the five boroughs, according to prosecutors.
When repairs or construction work require the use of outside contractors, services must typically be purchased via a bidding process. However, when the value of a contract was under a certain threshold, or up to $10,000, designated staff at NYCHA developments could hire a contractor of their choosing without soliciting multiple bids, as seen in all of the cases here. 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, according to prosecutors.
The defendants, all of whom were NYCHA employees, 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. 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, prosecutors said.
Sentencings are ongoing, but range up to 48 months in prison.
