70 current and ex-NYCHA workers cuffed in historic, decade-long $2M ‘classic pay-for-play’ bribery and extortion bust
Seventy current and former NYCHA workers were charged Tuesday in a 10-year, $2 million “classic pay-for-play” corruption scheme involving the largest number of federal bribery raps brought in a single day in Department of Justice history.
Some of the total kickbacks to the rogue workers hit more than $300,000 — and several of the heftiest charges were slapped against a 47-year-old female employee accused of helping an unnamed co-conspirator extort contractors in exchange for work with the agency, court documents claim.
“Babe[,] could you put a company through for someone? All you would need to do is sign the documents as the approved and get anyone to sign as the requestor,” the co-conspirator messaged Angela Williams on Feb. 3, 2022, according to the papers.
“That has been my side hustle…lol 1k per,” the unidentified person added to Williams — who allegedly wiped her phone through a factory reset in January 2023, thwarting the feds’ attempts to retrieve all of her texts.
Another suspect, who was busted along with his wife and a third NYCHA cohort working in tandem with them, even grew unsatisfied with the bribes he was receiving in cash tucked in envelopes and demanded double, authorities said.
Joseph Fuller, an assistant supervisor at Seth Low Houses in Brooklyn, told a contractor in 2021 that the standard 10% kickback of the contract value would no longer suffice and that he would be raising the rates up to to 20% — telling him “there were other contractors willing to pay that higher amount,” court papers say.
The contractor refused, and he did not get any more work at the property.
The avalanche of bribery and extortion crimes occurred in about a third of the 335 developments in the New York Housing Authority — the country’s biggest public housing agency — when the suspects demanded cash in exchange for lucrative construction, maintenance and no-bid contracts, officials said.
The defendants, all of whom were working for NYCHA at the time, sought between 10% and 20% of the contracts’ values – or kickbacks of between $500 and $2,000 – though some asked for higher amounts, authorities said.
In total, the dozens of rogue workers received more than $2 million in bribes involving $13 million in contracts between 2013 and 2023, officials said.
Williams, a housing manager who earned $70,978 from NYCHA in 2023, netted $15,000 in bribes, according to documents and online records.
But some defendants pocketed much more, authorities said.
Suspect Juan Mercado, a residential-building super, “solicited and accepted a total of at least approximately $314,300 in bribes in exchange for arranging for certain contractors to receive no-bid contracts from NYCHA worth a total of at least approximately $1,761,000,” the feds said.
Mercado’s salary was $99,478 last year.
A judge set his bond at $100,000, and his longtime partner, who was in the courtroom, posted the amount, freeing the suspect.
As part of the bond agreement, Mercado was ordered to surrender his cache of 37 handguns, 13 rifles and his firearms license. He is also restricted to travel only within the Eastern and Southern Districts of New York.
Super Nirmal Lorick netted a total of $153,000 in exchange for no-bid contracts worth at least $1.3 million, the court papers showed. The illicit kickbacks were in addition to Lorick’s NYCHA salary, which totaled $126,688 in 2023, according to records.
Another suspect, superintendent Jose Hernandez, allegedly demanded at least around $95,000 in bribes for no-contract bids worth at least $640,000.
Hernandez earned $90,228 in 2023.
A caretaker at East Harlem’sTaft Houses, who only gave his first name, Brian, told The Post that his boss, superintendent DeShon Hopkins, was arrested the moment he pulled up to the complex Tuesday morning.
“My coworker came up to me and said, ‘Yo, the feds came and picked up Hopkins.’ And I just couldn’t believe it. The minute he got out of the car, they got him,” Brian said.
Hopkins, 47, who earned $110,334 last year as a residential-building super, raked in $13,500 in bribes “in exchange for arranging for certain contractors to receive no-bid contracts from NYCHA worth a total of at least approximately $125,000 or to perform work pursuant to blanket contracts,” the feds said.
He is now facing charges of solicitation and receipt of a bride and extortion under color of official right, which carry up to 10 and 20 years behind bars, respectively.
“One thing I would say about working for Housing is, I definitely can see how easy it is to make friends and be tempted [with bribes]. … That’s why I stay clear from superintendents, ’cause you hear stuff like this happens,” Brian said.
Several of the suspects looked downtrodden as they were marched handcuffed into Manhattan federal court for their arraignments Tuesday afternoon.
The wife of one of the defendants complained to The Post that federal agents busted through her family’s front door at 5 a.m while the couple was getting their kids ready for school.
“I’m just shocked. I can’t believe it,” said the woman, who did not identify herself nor her husband.
She said she was in such a daze at the time that she couldn’t remember what law-enforcement officials said during the bust.
The woman was among a slew of suspects’ family members who packed the court’s hallways as their relatives prepared to make their first appearance in front of a judge. The court set aside seven different courtrooms to make room for all of the alleged crooked city workers.
The scheme spanned all five boroughs, authorities said — presenting a map at a press conference Tuesday morning littered with dots representing involved NYCHA sites.
Officials said the illegal payments have been a standard part of doing business for the last decade at the NYCHA units ensnared in the scheme.
Court documents show that the investigation has been ongoing for at least for at least four years, including with the cooperation of several contractors.
“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,” US Attorney Damian Williams Williams said in a joint statement with other officials.
“NYCHA residents deserve better,” he said. “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.”
Sixty-six of the 70 defendants were arrested Tuesday morning in New York, New Jersey, Connecticut and North Carolina, the Southern District of New York said.
The suspects arrested in the city were hauled off in cuffs from the Taft Houses and Harlem’s King Houses as well as other city housing complexes.
The defendants allegedly abused the powers given to them while dealing with “no-bid” city projects, contracts for smaller repairs and other construction at city housing developments.
As long as city contracts are worth under an estimated $10,000, local development managers can award them without going through the public bidding process — a system that is faster than the usual procurement process but also ripe for such potential corruption, sources told The Post.
The threshold for no-bid contracts was originally $5,000 before being doubled in 2019, the court documents viewed by The Post noted.
“[The suspects] used their positions of public trust and responsibility to pocket bribes in exchange for doling out no-bid contracts,” Department of Investigation Commissioner Jocelyn Strauber said in the statement.
“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,” she said.
The city oversight agency has recommended that NYCHA centralize its small project process, which would draw upon a pre-qualified list of contractors with preset estimates for most common services, while also have anti-bribery training for supers and contractors.
NYCHA's bribery and extortion scandal explained
- Seventy current and former New York City House Authority employees were arrested in a “classic pay-for-play” corruption scheme on Feb. 6, 2024.
- The defendants allegedly received more than $2 million in bribes between 2013 and 2023, according to officials.
- The bribery and extortion crimes were committed in about a third of NYCHA’s 35 developments.
- The typical kickbacks were between $500 and $2,000 — or about 10% to 20% of the contracts’ values.
- The bust was the largest number of federal bribery arrests in Department of Justice history.
The DOI recommended three of these changes in 2021 when a similar case was brought in Brooklyn, but those recommendations were never fully implemented.
It was unclear if those changes would have prevented the alleged widespread corruption.
Homeland Security Investigations Special Agent in Charge Ivan Arvelo said, “Make no mistake, this alleged pervasive corruption had the biggest impact on NYCHA residents themselves, who may have been cheated out of better services and programs.”
Those arrested were apprehended by the city Department of Investigation, Homeland Security and the Office of the Inspector General for Housing and Urban Development.
NYCHA is the largest public housing authority in the country, officials said.
The scandal-scarred agency provides housing for more than 330,000 people city-wide — and has notoriously come under heavy fire for decades over everything from conditions to finances.
NYCHA currently faces a staggering estimated $78 billion bill to get its complexes into good condition, after decades of federal and state budget cuts.
Under the Bloomberg administration, annual inspections of apartments were axed to try and stem the ballooning number of repair requests for apartments and complexes across the city. In 2018, it was revealed that NYCHA staffers even forged signatures on repair requests to game the numbers.
The cover-up just kept getting worse: Nixing the annual inspections also meant cutting the regular checks for lead in apartments, which NYCHA officials in the de Blasio administration certified were being done.
The resulting settlement left the agency under partial federal control and forced City Hall to fork over an extra $2 billion in repairs, which was still just a pittance of the agency’s then-estimated $40 billion bill of needs.
A 2019 investigation by The Post revealed that the city’s Health Department was aware there was still likely dangerous lead paint in apartments that were home to small children but that it allowed NYCHA to avoid making costly repairs.
“NYCHA has ZERO tolerance for wrongful and illegal activity,” said NYCHA chief executive officer Lisa Bova-Hiatt in a statement ahead of the press conference.
“The individuals allegedly involved in these acts put their greed first and violated the trust of our residents, their fellow NYCHA colleagues and all New Yorkers. These actions are counter to everything we stand for as public servants and will not be tolerated in any form.”
Additional reporting by Haley Brown and Jared Downing
