By Michael V. Cusenza
Two borough residents recently found themselves among the 70 current and former NYC Housing Authority employees charged with bribery and extortion offenses.
Jose Espinal, 57, of Howard Beach, and Nirmal Lorick, 58, of South Richmond Hill, each have been charged with solicitation and receipt of bribe, and extortion under color of official right. The bribery charge carries the potential maximum prison term of 10 years. The extortion offense carries the potential maximum prison term of 20 years.
According to the allegations in the Complaints and publicly filed documents in these cases:
NYCHA is the largest public housing authority in the country, providing housing to 1 in 17 New Yorkers in 335 developments across the city and receiving over $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development every year. When repairs or construction work require the use of outside contractors, services must typically be purchased via a bidding process. However, at all times relevant to the Complaints, when the value of a contract was under a certain threshold (up to $10,000), designated staff at NYCHA developments could hire a contractor of their choosing without soliciting multiple bids. This “no-bid” process was faster than the general NYCHA procurement process, and selection of the contractor required approval of only the designated staff at the development where the work was to be performed.
The defendants, all of whom were NYCHA employees during the time of the relevant conduct, demanded and received cash in exchange for NYCHA contracts by either requiring contractors to pay up front in order to be awarded the contracts or requiring payment after the contractor finished the work and needed a NYCHA employee to sign off on the completed job so the contractor could receive payment from NYCHA. As alleged, the defendants typically demanded approximately 10 percent to 20 percent of the contract value—between $500 and $2,000 depending on the size of the contract—but some defendants demanded even higher amounts. 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.
U.S. Attorney for the Southern District of NY Damian Williams said: “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. 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. The culture of corruption at NYCHA ends today.”
City Department of Investigation Commissioner Jocelyn Strauber added, “As charged, these 70 current and former NYCHA supervisors and other staff used their positions of public trust and responsibility to pocket bribes in exchange for doling out no-bid contracts. The extensive bribery and extortion alleged here calls for significant reforms to NYCHA’s no-bid contracting process, which DOI has recommended and NYCHA has accepted.”
If you believe you have information related to bribery, extortion, or any other illegal conduct by NYCHA employees, please contact OIGNYCHA@doi.nyc.gov or (212) 306-3356. If you were involved in such conduct, please consider self-disclosing through the SDNY Whistleblower Pilot Program at USANYS.WBP@usdoj.gov.
