A federal judge sentenced the former CEO of one of NYC’s largest homeless services contractors to six months in prison for fraudulently steering lucrative contracts to a business associate.
U.S. District Judge Vernon S. Broderick sentenced Thomas Bransky, the former CEO of Children’s Community Services (CSS), on June 30 after Bransky pleaded guilty to conspiracy to commit wire fraud late October.
The prison term will be followed by three years of supervised release.
The U.S. Attorney’s Office of the Southern District of New York prosecuted Bransky for helping to intentionally conceal his connection to Peter Weiser, a business partner who helped form and operate CCS. After the two covered up their business connection, Bransky helped Weiser attain service contracts and city contracts that charged $50 million in inflated prices, according to the city’s Department of Investigation (DOI).
Weiser, Bransky’s co-defendant, also pleaded guilty and is scheduled to be sentenced on July 29.
Between November 2014 and February 2020, the city granted CSS 12 contracts over $900 million, according to a press release from the U.S. Attorney’s Office of the Southern District of New York.
Weiser collected more than $7 million in illicit profits from the scheme, while Bransky earned $1.2 million in salary, according to DOI. As part of his sentencing, Branksy was also ordered to pay approximately $7.7 million in restitution and $1.2 million in forfeiture. His surrender date is set for September 29, 2026.
Branksy and Weiser conspired to “disguise” sham contractors that Weiser set up as he got around $50 million in city contracts for services such as providing electronics, security, furniture and food, according to the prosecutors. The funds went to what officials called “fly-by-night companies with no or few employees” controlled by Weiser, who were listed as having “straw owners,” according to the U.S. Attorney.
These entities largely took goods and services from real firms and then resold them to CCS at inflated prices. The city would not have authorized the contracts if they had looked at accurate disclosures about Weiser’s involvement, according to prosecutors.
“These defendants exploited their nonprofit organization and the City’s need for services for homeless New Yorkers to commit fraud, causing the City to pay over $50 million to the nonprofit that it otherwise would not have, and that included inflated prices and unreasonable mark-ups for goods and services,” wrote DOI Commissioner Jocelyn E. Strauber in a statement after Bransky pled guilty in October.
The city agency partnered with the U.S. Attorney on the case.