Arrests Made in DOB and HPD Bribery Probe

A sweeping corruption investigation led to the recent indictment of 16 employees in the Department of Buildings and Department of Housing Preservation and Development, along with various property managers, contractors, and expeditors. The defendants are charged in 26 indictments including bribery, bribe receiving, falsifying business records, tampering with public records, and official misconduct.

The nearly two-year-long investigation began as an inquiry into the bribery of a single DOB inspector. The District Attorney’s Office and the NYPD utilized court-authorized wiretapping; analysis of DOB, HPD, financial, and phone records; and surveillance over the course of the investigation. The investigation revealed evidence of approximately $450,000 worth of alleged bribes in numerous, distinct schemes between 16 DOB and HPD employees and 22 property managers and owners, six expeditors, two contractors, and one engineer.

According to court documents and statements made on the record in court, over the course of several years, 11 DOB employees, ranging in roles from clerks to chiefs, allegedly accepted bribes in Manhattan and Brooklyn. These DOB employees are charged with accepting monetary payments ranging from $200 to $3,000, and other benefits from property managers and expeditors (filing representatives registered by the DOB to act as middlemen between the department and contractors, homeowners, and managing agents). In exchange, the DOB employees allegedly cleared complaints, Stop Work Orders, and violations, and expedited DOB inspections, enabling expeditors to bypass proper channels and deal directly with high-level DOB employees.

Beginning in September 2011, an unregistered expeditor allegedly sent a list of addresses of locations owned by his clients to the then-DOB Chief of Development for Brooklyn Construction, bypassing proper DOB channels, on a near daily basis. A DOB inspector would inspect these addresses at the Chief of Development’s request, and invariably the buildings would pass inspection. The Chief of Development allegedly signed off on the inspections within the same day, using his supervisory position to carry out the scheme without detection.

In exchange, the expeditor was alleged to have paid the Chief of Development and his wife bribes in the form of approximately $200,000 in home mortgage payments, a Nissan Rogue SUV, a GMC Terrain SUV, and a Royal Caribbean cruise, as well as cash for airline tickets, home renovations, and other personal expenses. The same expeditor is similarly alleged to have paid the inspector more than $70,000 in cash bribes for signing off on his necessary inspections, in addition to allegedly paying $2,000 to $3,000 at a time in cash to two clerks, who allowed him to cut past people waiting in line at DOB’s Brooklyn office without showing the required credentials.

After he stopped working with the Chief of Development, the expeditor is alleged to have developed a new scheme in June 2014 involving a client manager at the NYC Department of Small Business Services (SBS). He is charged with bribing the client manager to route his favored inspector to his properties, including those that fell outside of SBS’s mission, like residential buildings and synagogues, by promising to pay rent on her apartment. In turn, the expeditor then allegedly bribed the inspector to perform favorable inspections on his properties.

With regard to alleged bribery schemes involving HPD employees, according to court documents, between May and August 2014, a Brooklyn HPD housing inspector and a Manhattan HPD associate inspector in a supervisory role dismissed HPD violations and falsified HPD records in exchange for bribes from nine property owners, managers, and an expeditor. In total, the inspectors are alleged to have fraudulently dismissed 778 HPD violations from 24 properties in Brooklyn in exchange for more than $41,000 in bribes.

In one such scheme, between June 2014 and August 2014, a Brooklyn property manager is charged with paying an inspector more than $20,000 in bribes to remove 476 violations at 13 separate properties in the Bushwick, Williamsburg, and Bedford-Stuyvesant neighborhoods of Brooklyn. The housing inspector then allegedly paid the associate inspector to falsify records in HPD’s BOSS system. The dismissed violations include the presence of mice and roaches; missing smoke detectors and carbon monoxide detectors; inadequate lighting at a building’s entrance; and a defective hallway ceiling.