The Department of Justice has convicted dozens of New York City Housing Authority employees in a pay-to-play contracting scheme.
The 70 employees were charged in February 2024 with accepting bribes in exchange for awarding repair contracts. In an announcement Tuesday, federal prosecutors called the sweep “one of the largest single-day corruption cases in the history of the Justice Department.”
St. Mary’s Park Houses, a NYCHA development in the Bronx
Three defendants were convicted after jury trials, 56 defendants pleaded guilty to felony offenses and 11 defendants pleaded guilty to misdemeanor offenses.
All together, the defendants accepted $2.1M in bribes in exchange for distributing $15M of no-bid contracts. The scheme touched almost one-third of NYCHA’s 365 developments across the five boroughs, according to the announcement.
NYCHA requires contractors to undergo a bidding process for jobs valued at more than $10K. In the cases pinpointed by the DOJ, the contracts fell below the threshold, allowing NYCHA staffers to distribute work to companies of their choosing without soliciting other bids.
As part of the scheme, employees — primarily managers — requested cash payments from contractors either before awarding contracts or after the work was completed, when a city worker’s sign-off was required, the DOJ said.
The defendants typically received approximately 10% to 20% of the contract value — ranging from $500 to $2,000 — though some were paid even more.
Sentencing is ongoing but may include up to two years in prison. Additionally, the defendants were ordered to pay over $2.1M in restitution to NYCHA and forfeit over $2M in criminal proceeds.
“Today’s final guilty plea is an important milestone in bringing to an end the egregious pay-to-play bribery scheme that wasted millions of dollars that should have benefited [U.S. Department of Housing and Urban Development] tenants in New York and raised serious questions about the integrity of NYCHA operations,” HUD Acting Inspector General Brian Harrison said in a statement.
New York City Department of Investigation Commissioner Jocelyn Strauber noted in a statement that her office made recommendations in 2021 to regulate the microbidding process.
The city authority has now implemented 14 new controls to the process, three of which are similar to the 2021 recommendations that it previously rejected.
NYCHA is the largest public housing authority in the country, with nearly 178,000 apartments. About one in 17 New Yorkers lives in city-operated housing.
Years of neglect have notoriously led to poor housing conditions within NYCHA developments. A 2023 audit projected the total cost of repairs and replacements to exceed $78.3B over the next 20 years.
“[The defendants] chose to serve themselves instead of the residents of NYCHA, driving up costs of maintenance and improvements in a public housing system dependent on scarce resources,” Strauber said in her statement.