FBI Busts New York City Housing Official On Corruption Charges
A top city housing official was busted Thursday on charges of pocketing at least $600,000 in kickbacks over the past decade at the expense of taxpayers. Hit the jump to read the rest of the story.
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Wendell Walters, an assistant commissioner in the city’s Housing & Preservation department, was charged along with six developers who built affordable housing for the agency.
Walters allegedly met one of the contractors at a golf driving-range in the Bronx, where he’d hand the contractor a slip of paper with a number – 250 signifying $250,000, for example.
The contractor would then make cash payments, sometimes more than $25,000 at a time, stuffing money in golf ball boxes, overnight mail envelopes and coffee cups, prosecutors allege.
One of Walters’ codefendants is Sergio Benitez, a developer who is currently at the heart of an ongoing corruption probe involving City Councilman Erik Dilan.
The Daily News reported last spring that in 2008 Dilan moved into affordable housing built by Benitez, though records show his income exceeded the eligibility requirements.
The apartment was available to families making under $114,000, but at the time Dilan and his wife made about $160,000 between his Council job and her work for a non-profit.
Benitez was also a Dilan campaign donor.
The arrests follow a joint investigation by the FBI and the city Department of Investigation into corruption in several HPD programs meant to provide affordable apartments.
In the long-running scheme described in a 41-page multi-count indictment, Walters allegedly pocketed kickbacks from developers who, in turn, pocketed kickbacks from contractors hired to build the apartments.
All of these ill-gotten gains would then be passed on to the taxpayers through inflated bills, according to the indictment brought by Brooklyn U.S. Attorney Loretta Lynch.
Two of the contractors are cooperating with the government, secretly recording conversations with Walters and developer Stevenson Dunn – identified as a friend of Walters since high school.
In conversations, Dunn referred to the 6’7″ Walters as “the big man” and complained that Walters was “greedy” for demanding a $75,000 payoff. That payment wound up being only $25,000.
DOI also accessed Walters’ HPD e-mails, finding interactions with the allegedly corrupt contractors and developers dating back to 2001 – just three years after Walters started at the agency.
Prosecutors say Walters bought his Strivers Row apartment building in Harlem from a developer who was doing extensive business with the city.
The developer, who has since died, was not named but real estate records identify him as Edward Pinckney.
The list price for Walters’ W. 139th St. building in 2004 was $561,000. Investigators described the transaction as a bribe in court papers.
Walters also controls a Bronx apartment building that’s held in the name of another developer who’s done business with HPD, prosecutors say.
After that developer went bankrupt, one of the contractors cooperating with investigators asked Walters if he could buy him out.
The conversation took place inside Walters’ ninth floor office at HPD, and when the contractor suggested a $1 million price, Walters replied, “That’s the number I’m counting on.”
FBI agents executed a search warrant at the HPD office in lower Manhattan and at Walters’ Harlem brownstone, seeking his computer and other records, sources said.
All were expected to be arraigned Thursday in Brooklyn Federal Court.
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