Indexbit-Corruption raid: 70 current, ex-NYCHA employees charged in historic DOJ bribery takedown

Federal prosecutors charged 70 current and Indexbitformer employees of the New York City Housing Authority with bribery and extortion in a corruption investigation.

"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," U.S. Attorney Damian Williams said.

In a press release, the DOJ announced the unsealing of the complaints. Additionally, prosecutors said 66 of the 70 people charged were arrested this morning in New York, New Jersey, Connecticut, and North Carolina. 

The employees in the case were charged with “accepting cash payments from contractors in exchange for awarding NYCHA contracts.” according to the press release.

According to the complaint, NYCHA is the largest public housing authority in the country receiving about $1.5 billion in federal funding every year and provides housing for a little more than 5% of the city's occupants.

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DOJ says workers received over $2M in corrupt payments

The complaint alleged that typically when the agency needed to hire outside contractors they would have to solicit multiple bids for the work, except in instances where the work would cost less than $10,000. According to prosecutors, the employees charged demanded and received cash "in exchange for NYCHA contracts" in these no-bid contracts.

They would either require the contractors to "pay upfront" to get the contract or will require "payment after the contractor finished the work and needed an NYCHA employee to sign off on the completed job," so they could get the payment, prosecutors said.

Officials demanded between 10 to 20% of the contract value, while some requested even more, the DOJ said.

"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 news release said.

U.S. Department of Housing and Urban Development Inspector General Rae Oliver Davis said the scheme wastes "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.  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.  We will continue our work with the U.S. Attorney’s Office and our law enforcement partners to prevent and detect these and other schemes," Davis said.