Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
All 70 employees of the New York City Housing Authority (NYCHA) who were arrested and charged in February 2024 have now been convicted of bribery, fraud, or extortion offenses, according to an announcement by the United States Attorney for the Southern District of New York, Jay Clayton. The convictions stem from a large-scale investigation into corruption involving NYCHA repair contracts.
Of those charged, three were convicted after jury trials, while 56 pleaded guilty to felony offenses and 11 to misdemeanor offenses. Sentencing is ongoing, with sentences so far reaching up to 48 months in prison. The group collectively accepted over $2.1 million in bribes in exchange for awarding NYCHA contracts worth more than $15 million. As part of their sentences, the defendants will pay over $2.1 million in restitution to NYCHA and forfeit more than $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 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. This broad and swift action demonstrates our Office’s commitment to combatting corruption in our nation’s largest public housing authority—home to 1 in every 17 New York City residents.”
Jocelyn E. Strauber, Commissioner of the New York City Department of Investigation (DOI), commented on the scope and impact of the investigation: “Today, the last of the 70 NYCHA employees charged with bribery and extortion in connection with the awarding of micro-purchase contracts pled guilty, closing the chapter on an investigation in which DOI and our federal partners exposed widespread corruption that touched almost one-third of NYCHA’s 365 developments in each of the five boroughs,” she said. “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, awarded in exchange for the payment of more than $2.1 million in bribes to employees who 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. 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 – three of which were similar to DOI’s 2021 recommendations that were rejected by NYCHA. I thank the U.S. Attorney’s Office for the Southern District of New York and our federal law enforcement partners for their commitment to thwart corruption that drains public housing resources, and NYCHA for the implementation of much-needed contracting reforms.”
Brian D. Harrison, Acting Inspector General at HUD-OIG stated: “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 HUD tenants in New York and raised serious questions about the integrity of NYCHA operations,” he said. “All 70 of the NYCHA employees who failed to uphold the basic duty of not stealing from public housing have now admitted guilt or been found guilty at trial within two years of indictment, a testament to the investigative excellence of HUD OIG and its law enforcement partners. We are grateful to the U.S. Attorney’s Office for its support and prosecutions in this case and know that this sends a clear signal to corrupt public officials that they will be held accountable.”
Ricky J. Patel from Homeland Security Investigations added: “Nearly two years ago, HSI New York and our law enforcement partners announced a sweeping investigation that uncovered a brazen corruption and extortion scheme that marked the largest number of federal bribery charges in a single day in history,” he said. “Today’s guilty plea is the latest step in exposing a scheme that exploited NYCHA’s operations, shortchanged its communities, and siphoned trust and resources from NYCHA residents—New Yorkers who deserve better. Working in lockstep with our federal, state, and local law enforcement counterparts, HSI will keep pressing forward to protect New Yorkers and ensure that anyone who attempts to jeopardize their well-being faces decisive consequences.”
Jonathan Mellone from DOL-OIG remarked: “An important part of the mission of DOL-OIG is to investigate fraud and other federal crimes involving matters within the jurisdiction of the Office of Inspector General,” he said. “The seventy convictions obtained in this investigation send a clear message that public corruption will not be tolerated. We are committed to working closely with our law enforcement partners to investigate those who exploit governmental programs and American workers.”
Harry T. Chavis from IRS-CI also commented: “IRS-CI will continually use its unique expertise in tax and finance to find leverage in assisting with complex investigations,” he said.“We are proud to build on our law enforcement partnerships to continue bringing criminals to justice.”
Court records indicate that during relevant periods covered by these cases, certain staff at each development could hire contractors without soliciting multiple bids if contract values were under $10,000—a process intended as a faster alternative but vulnerable due to limited oversight.
The convicted employees required contractors seeking repair work at various developments across all five boroughs either pay cash up front or after job completion before authorizing payment through official channels—typically demanding between 10%–20% per contract value.
The U.S Attorney's Office noted appreciation for investigative agencies including DOI, HUD-OIG, HSI,DOL-OIG,and IRS-CI as well as support from senior executive leadership at NYCHA.The Public Corruption Unit led prosecution efforts.
