New York Construction Report staff writer
All 70 employees of the New York City Housing Authority (NYCHA) charged in February 2024 in the largest single-day federal bribery case in Department of Justice history have now been convicted of bribery, fraud, or extortion, federal officials announced Tuesday.
Three defendants were convicted at trial, 56 pled guilty to felony offenses, and 11 pled guilty to misdemeanor offenses. Sentences are ongoing, with penalties imposed so far reaching up to 48 months in prison. The defendants collectively accepted more than $2.1 million in bribes in exchange for NYCHA contracts worth over $15 million. They will also pay more than $2.1 million in restitution and 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,” said U.S. Attorney for the Southern District of New York Jay Clayton. “All 70 charged defendants have now been convicted for attempting to criminally leverage the contracting process of work for affordable housing for New Yorkers to line their own pockets. NYCHA residents deserve better. New Yorkers deserve better.”
The scheme involved no-bid contracts under $10,000, which allowed designated staff at NYCHA developments to hire contractors without soliciting multiple bids. Employees demanded cash payments from contractors either upfront or after work was completed in order to approve the jobs. Payments typically ranged from 10% to 20% of the contract value.
DOI Commissioner Jocelyn E. Strauber said the investigation uncovered corruption affecting nearly one-third of NYCHA’s 335 developments across the five boroughs. “All the defendants, many of them supervisors, now have taken responsibility for separate schemes that, in total, involved more than $15 million in no-bid contracts,” Strauber said. “To date, approximately $2 million in restitution to NYCHA and nearly $2 million in forfeiture has been ordered. Equally important, DOI’s 14 recommendations to improve controls with respect to NYCHA’s micro-purchase contracting have been implemented.”
Officials from the U.S. Department of Housing and Urban Development, Homeland Security Investigations, the Department of Labor, and IRS Criminal Investigation also praised the investigation and convictions as a major victory against public corruption.
NYCHA is the largest public housing authority in the country, providing housing to one in 17 New Yorkers and receiving over $1.5 billion in federal funding annually. The convictions are part of a broader effort to restore integrity and transparency to the agency’s contracting processes.
