HPD Official Indicted For Alleged Racketeering, Bribery And Extortion

NEW YORK (CBSNewYork) – A top official in New York City’s Housing Department faces a host of charges for allegedly being involved in a kickback scheme.

Assistant Commissioner Wendell Walters, 49, of the Department of Housing Preservation and Development, was arrested this morning. Walters and six other folks – lawyers and real estate developers – face racketeering, bribery, wire fraud, money laundering and extortion charges.

The others who face charges are real estate developers Stevenson Dunn, 50, Lee Hymowitz, Esq., 60, Michael Freeman, Esq., 64, Sergio Benitez, 51, Robert Morales, 52 and Angel Villalona, 52.

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Prosecutors say Walters and the others were involved in schemes that racked up $1-2 million in kickbacks and bribes connected to Department projects in Brooklyn, Queens and the Bronx.

While at HPD, prosecutors say Walters oversaw numerous programs that were designed to enable private property managers, developers and non-profits to rehabilitate buildings to provide affordable housing.

Walters allegedly accepted some $600,000 in bribes since 2002 from general contractors and real estate developers in exchange for awarding them contracts.

The FBI searched Walters’ home in Harlem this morning, leaving with at least one computer. They also searched his office located two blocks from City Hall.

The details of the indictment read like something out of a seedy pulp novel. Prosecutors allege Walters would hand a general contractor a slip of paper with a number on it – typically “250,” signifying his desire for a $250,000 payoff. Prosecutors say the general contractor would pay Walters off in cash hidden in overnight mail envelopes, golf ball boxes, and even coffee cups.

Meanwhile, Walters awarded the contractor for HPD projects in excess of $10 million, prosecutors say.

Mayor Michael Bloomberg said, “We just have no tolerance for corruption with anybody in city government.”

HPD Commissioner Mathew Wambua issued a statement in response to Walters’ arrest:

“The City’s Department of Investigation has uncovered very serious allegations of misconduct that led to the arrest of Assistant Commissioner for New Construction Wendell Walters. He has been an employee here since 1998 and is now suspended without pay. In addition we have disqualified the developers and contractors named in the course of the investigation and are in the process of ascertaining whether, in fact, any of them are currently active with respect to HPD programs.”

Wambua’s statement went on to say “There is no room for corruption or bribe seeking in government and these circumstances pain me deeply on a number of levels. We are here to serve the people, not to take advantage of our positions for personal profit. I want to make it clear that I do not view the actions of this individual as representative of the great work the agency does, day-to-day, in carrying out the nation’s largest municipal affordable housing plan and ensuring that New Yorkers live in safe and quality housing no matter what their income.”

What’s your reaction to the allegations? Sound off in our comments section.

  • pete

    Whoever had to deal with the Housing and Buildings Departments found out fast that they were corrupted to the core and in the pockets of landlords and developers. This is just the tip of an iceberg, but it is a shame that it came out only after years of “investigating” what everybody knew already a long time. Close down these departments, kick the bums out on the street or lock them up for good, and start all over with new people. There are plenty of them on the unemployment lines who are willing and able to do an honest days work for an honest day’s pay.

    • Justice4Homeowners

      And the real losers here are the homeowners stuck with a shoddy product because all the money went towards their corruption, leaving them saddled with endless repair bills. http://www.justice4homeowners.org

  • Carey FL

    This all points to corruption and cronyism running rampant in all branches of our government.

    Consider what just happened in a federal court in Texas. A Dallas business owner was involved in a civil dispute and paid millions of dollars to lawyers, and when he objected to their fees, they had a “friendly” judge seize all of his property, without any notice or hearing, and essentially ordered him to be an involuntary servant to the lawyers. The business owner has been under this “servant” order for 10 months and is prohibited from owning any possessions, prohibited from working, etc…

    http://www.lawinjustice.com has details about this disturbing case. Here are some actual quotes, on the record, from the judge in this case:

  • Kenny Yu

    Welcome to BloombergCity.

    • shoelace

      What does Bloomberg have to do with it?

      • dr meh

        Bloomberg appoints the Comissioner who appoints the assistant comissioner and in this case the assistant comissioner doesn’t fall far from the tree.

  • Johnny Handsome

    Business as usual in NYC.

    • Johnny Handsome

      Why do hold your head down? Stand tall and proclaim “I am thief, hear me roar!”

  • Don Juan

    I am not surprised. There is a profound ethical lapse in this country.

    • dr meh

      agreed, it’s this entitlement thing that’s going around

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