HPD official and six developers are arrested on bribery charges

October 06, 2011 12:53PM

An official in the city’s Department of Housing Preservation and
Development responsible for the construction of affordable housing was
arrested early this morning on federal racketeering conspiracy and
bribery charges with six developers, two of them lawyers, the New York Times reported.

According to the charges, Wendell Walters, assistant commissioner for
new construction, transformed the agency into a racketeering
enterprise along with developer Stevenson Dunn.

Walters is alleged to have taken approximately $600,000 in bribes and
kickbacks on about $22 million in moderately priced housing projects
overseen by HPD in the Bronx, Queens
and Brooklyn between 2002 and 2011, officials said. Walters had played
a key role in Mayor Michael Bloomberg’s $8.5 billion housing plan to
preserve and build 165,000 apartments for half a million middle-class
and working-class New Yorkers by 2014.

Walters’ scheme cost the agency he helped manage hundreds of thousands
of dollars in overpayments to developers on numerous projects,
prosecutors said. “As detailed in the government’s indictment and
other court filings, the defendants corruptly lined their own pockets
by stealing millions of dollars in public funds dedicated to
affordable housing,” said Loretta Lynch, the United States attorney
for Brooklyn. The lawyers charged in the case were Lee Hymowitz and
Michael Freeman. The other developers were Sergio Benitez, Robert
Morales and Angel Villalona. Their lawyers could not
immediately be reached for comment.

The New York Times reported that the charges grew out of a Federal Bureau of Investigation
investigation in 2008 into the extortion of a number of Polish
construction workers in the Greenpoint section of Brooklyn who sued a
contractor who was paying them about $15 an hour for work that union
workers were paid about $60 an hour. [NYT]