An assistant commissioner for the New York City
Department of Housing Preservation and Development (HPD)
and six others were arrested on racketeering conspiracy and
other charges in connection with schemes that netted them
between $1 million and $2 million in kickbacks and bribes
over a decade, announced federal and city law enforcement
He received payments that were hidden in golf ball boxes
and coffee cups, according to officials.
The Federal Bureau of Investigation said the schemes
cost HPD hundreds of thousands of dollars in
overpayments to developers on HPD projects in
Brooklyn, Queens, and the Bronx.
Wendell Walters, HPD’s assistant commissioner
for new construction, was arrested along with developers
Stevenson Dunn, Lee Hymowitz, Michael Freeman, Sergio
Benitez, Robert Morales, and Angel Villalona, the FBI
“New Yorkers relied on these defendants for the
safe haven of affordable housing,” said Loretta
Lynch, U.S. attorney for the Eastern District of New York.
“Instead, the defendants allegedly put their own
greed over the needs of low-, moderate-, and middle-income
New Yorkers. 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
At HPD, Walters, 49, oversaw various programs, including
the Neighborhood Entrepreneurs Program and the Division of
Housing Production, which were aimed at enabling private
property managers, developers, and nonprofits to build and
rehabilitate buildings to provide affordable housing.
The indictment and search warrant application for
Walters’ residence and HPD office allege that
beginning in 2002 he accepted approximately $600,000 in
bribes from general contractors and real estate developers
in exchange for awarding them HPD contracts.
On multiple occasions, Walters allegedly summoned a
general contractor, identified as John Doe No. 1 in the
indictment, to various locations around the city, including
a golf driving range in the Bronx, where Walters would hand
John Doe No. 1 a slip of paper with the
amount—usually “250,” signifying
$250,000—that Walters was demanding, said the FBI
in a statement.
In subsequent meetings, John Doe No. 1 would make cash
payments, often in excess of $25,000 at a time, to Walters,
hiding the money in golf ball boxes, overnight mail
envelopes, and coffee cups.
During the same time period that he was paying these
bribes, John Doe No. 1 was awarded the general contracts
for the following HPD projects: the Lexington Avenue,
Watkins Avenue Cluster, Bedford-Stuyvesant, and Cooper-
Decatur Cluster projects in Brooklyn; the Alexander Avenue
and Crotona Park Cluster projects in the Bronx; and the Guy
Brewer North Homes in Queens. The value of these general
contracts was often in excess of $10 million, said the
The developers then allegedly received kickbacks from
contractors in exchange for awarding them construction work
on the projects, said the FBI statement.
If convicted of the most serious offenses, each
defendant faces a maximum of 20 years’
imprisonment. The government will also seek to forfeit at
least $22 million in proceeds that the defendants received
as a result of their schemes.