U.S. Attorney Damian Williams's Remarks on the Charges Against 70 Current and Former NYCHA Employees

Good morning.  My name is Damian Williams, and I am the United States Attorney for the Southern District of New York.

Today, I am announcing the largest single-day bribery takedown in the history of the Justice Department.  We have brought bribery and extortion charges against 70 current and former employees of the New York City Housing Authority – “NYCHA.”  As we allege, the 70 defendants charged today demanded over $2 million in bribe money from contractors in exchange for giving out over $13 million worth of work on NYCHA buildings.  And if the contractors didn’t pay up, the defendants wouldn’t give them work.  That’s classic pay to play.  This culture of corruption ends today.

The corruption we’ve alleged infected every corner of this city.  As the charges show, superintendents accepting and extorting bribes from contractors had become business as usual, occurring in almost 100 NYCHA buildings and across all five boroughs.  That’s nearly a third of all NYCHA buildings.    

NYCHA is the largest public housing authority in the country, and it receives over $1.5 billion in federal funding every year.  It is home to 1 in 17 New Yorkers.  But 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. 

As we allege, these 70 defendants all committed these crimes in essentially the same way:    

Superintendents, assistant superintendents, and others held great power in deciding which contractors would receive small contracts for repair or construction work.  These contracts were valued at under $10,000, but they involved essential work in NYCHA buildings, such as plumbing or window repairs.  The contracts were sometimes called “no bid” contracts because they did not need to go through a bidding process.  Instead, the superintendent or assistant superintendent could choose the contractors who would receive these contracts, and that is the power we allege these defendants abused. 

After a contractor finished the work, the superintendent or assistant superintendent needed to sign off on the work so the contractor could get paid by NYCHA, but we allege that the defendants demanded their own cut – cash bribes – in order to do their jobs assigning and approving these repairs.  Only when the defendants received those cash bribes would they award the contract or sign off on payment to the contractors.  And many contractors paid these bribes because if they didn’t, the defendants would give the jobs to someone else. 

Unfortunately, we allege that this conduct became a regular practice that dozens of NYCHA employees engaged in. 

This is a map of NYCHA developments around the City.  The red circles show developments where the defendants allegedly took cash bribes in exchange for awarding contracts at NYCHA – there are nearly 100 red dots on this map, in all five boroughs.  That’s nearly one-third of the City’s 335 developments. 

I want to make two things very clear.  First, NYCHA residents deserve better.  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.  Second, I want to emphasize that we’re not done.  As announced earlier this year, one of my top priorities is to fight the corruption that pollutes our politics and public institutions. 

I recently announced a new tool to help us in that fight – a groundbreaking whistleblower program to encourage voluntary self-disclosure of criminal conduct.  It’s the first whistleblower program ever developed by a U.S. Attorney's Office.  People who meet the criteria of the program and report criminal conduct – before we find it on our own – will be allowed to enter into a non-prosecution agreement in exchange for their cooperation.  It gives people a choice.  You can come clean quickly and get on the right side of the law.  Or you can roll the dice and find yourself in handcuffs like the 70 NYCHA employees charged today when we uncover the crime ourselves.  You can report the criminal conduct you know about by emailing USANYS.WBP@usdoj.gov.  

And, as always, anyone who is aware of wrongdoing in city government – whether you’re a contractor, a NYCHA employee, a resident, or anyone else – can report it directly to the New York City Department of Investigation by calling 212-306-3356 or emailing OIGNYCHA@DOI.NYC.gov. 

Contractors who paid NYCHA superintendents should not be afraid to come forward and speak out.  As the complaints today make clear, many contractors have already been brave enough to tell law enforcement about the bribes NYCHA employees demanded of them.  Going forward, contractors should understand that NYCHA employees should not be asking for a single penny – and if they do, now you know where to report it.

Public housing is a vital part of New York’s history, present, and future, and those who betray NYCHA, the city, and the taxpayers will be held accountable.   

Today’s charges are the product of a tremendous partnership.  Nearly 700 law enforcement agents participated in the arrests that took place in New York and elsewhere today.

I want to thank our partners at the New York City of Department of Investigation; U.S. Department of Homeland Security – Homeland Security Investigations; U.S. Department of Housing and Urban Development – Office of Inspector General; and U.S. Department of Labor – Office of Inspector General, as well as the special agents and task force officers of this Office.  Building a case and executing arrests on this scale has required tremendous resources and dedication, and these agencies have been with us every step of the way.  I also want to thank the New York City Police Department and the U.S. Marshals Service for their assistance with today’s arrests.

I also want to commend NYCHA – they have already begun to implement changes to root out corruption and have been entirely supportive of our efforts to hold corrupt NYCHA employees accountable.  We have worked collaboratively with NYCHA to ensure that today’s operation does not significantly disrupt NYCHA’s operations.  I understand that every current NYCHA employee charged in this takedown will be suspended effective today, and NYCHA has lined up the necessary resources to fill those roles to avoid any disruption in services to NYCHA residents.

And, finally, I also want to commend the outstanding career prosecutors from my Office who are handling the case, Jerry Fang, Jacob Fiddelman, Meredith Foster, Catherine Ghosh, and Sheb Swett, and their supervisors, Maurene Comey and Robert Sobelman, the chiefs of the Public Corruption Unit.

It’s now my pleasure to turn the podium over to the Commissioner of the New York City Department of Investigation, Jocelyn Strauber.