DC developer and former FBI agent sentenced in real estate bribery scheme

A Washington, D.C., real estate developer and a former FBI agent were sentenced last week after being convicted of bribery and conspiracy charges related to a real estate scheme.

Brian Bailey and David Paitsel were sentenced to four years and two years in prison, respectively, by U.S. District Judge Colleen Kollar-Kotelly according to a U.S. Attorney’s press release. A jury convicted both convicted last year. 

Bailey, the developer, lives in Upper Marlboro, Maryland. In addition to the prison time, he received 24 months of supervised release, a $100 special assessment and a $250,000 fine. 

Paitsel, who lives in North Carolina, received a 24-month prison sentence, 24 months of supervised release and a $100 special assessment. The judge ordered him to pay a $10,600 forfeiture money judgment as well.

Their scheme revolved around accessing sensitive tenant information. 

Bailey paid thousands of dollars to a program specialist with the D.C. Department of Housing and Community Development in exchange for confidential Tenant Opportunity to Purchase Act offer of sale notices. The notices contained names of tenants who had the right to purchase their units or assign this right to a third party. Bailey then used the information in his real estate dealings.

Bailey then paid Paitsel to access contact information of tenants with TOPA rights, a jury found.. Paitsel used his FBI access privileges to retrieve this data from a secure database.

Earlier in June 2019, Dorsey, the District of Columbia government employee, pleaded guilty to bribery and is set to be sentenced on Nov. 6. 

In a related case, Frederick Silvers, from Washington, D.C., was sentenced to five months in prison for bribes paid to Dorsey.

The FBI’s Washington Field Office and the District of Columbia Office of the Inspector General jointly investigated the case. Assistant U.S. Attorneys Elizabeth Aloi and John Borchert led the prosecution, with support from Paralegal Specialists Lisa Abbe and Quiana Dunn-Gordon of the Fraud, Public Corruption, and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia.

While it may be unusual for a former FBI agent to be involved, developers sometimes get caught in bribery schemes.

A developer involved in Los Angeles’ most explosive real estate corruption scandal in decades was sentenced recently to six years in federal prison. 

Bel Air resident David Lee paid $500,000 to Jose Huizar–a former Los Angeles councilmember who sat atop the city’s Planning and Land Use Management Committee–to buy influence on a 200-unit residential project in Downtown Los Angeles. 

U.S. District Court Judge John F. Walter had harsh words for Lee, according to a Department of Justice release, remarking that Lee showed a “lack of remorse and arrogance” in phone conversations that were brought as evidence and that his “only regret is that he got caught.” 

Lee also was ordered to pay a $750,000 fine, the maximum penalty allowed, and an LLC controlled by the developer got hit with a fine of $1.5 million. 

Lee’s project had drawn opposition from a labor group, so he contacted a Huizar fundraiser. The councilmember eventually initiated a pay-for-play scheme for the project that involved a $500,000 bribe from the developer to Huizar and an assistant. 

“Despite enjoying a life of privilege and abundance, Lee wanted more,” prosecutors argued in the case against Lee. “But instead of earning it, he wanted a guaranteed shortcut to circumvent the city process and silence community opponents threatening to thwart his attempts to expand his substantial real estate empire.” 

Lee was convicted of multiple charges last June.