HARLEM — A commissioner for the city's Department of Housing Preservation and Development was arrested at his Harlem home by the FBI Thursday and charged with a decade-long bribery and extortion construction kickback scheme that allegedly netted between $1 million and $2 million for the seven people involved.
Wendell Walters, HPD's Assistant Commissioner for new construction, was charged with racketeering conspiracy, bribery, extortion, wire fraud and money laundering for allegedly accepting $600,000 in bribes since 2002.
According to the indictment, Walters would meet with general contractors and developers at various locations around the city, including a Bronx golf driving range. Walters handed one contractor a slip of paper with "250" written on it, representing the $250,000 payment he wanted.
During later meetings, the unidentified contractor would pass Walters bundles of cash, sometimes in excess of $25,000, which he would hide in his golf ball box, coffee cups or overnight mail envelopes, the indictment said.
During the period the contractor was paying the bribes, he was awarded four general construction contracts in Brooklyn, the Bronx and Queens that were often worth $10 million. The alleged extortion cost HPD hundreds of thousands of dollars in cost overruns. The defendants also netted $22 million in payments that the government will seek to recover.
Walters oversaw programs that were aimed at allowing developers, entrepreneurs and non-profits develop affordable housing for New Yorkers.
A search warrant was executed at Walter's home and office.
“New Yorkers relied on these defendants for the safe haven of affordable housing.
Instead, the defendants allegedly put their own greed over the needs of low-, moderate- and
middle-income New Yorkers," Loretta E. Lynch, United States Attorney for the
Eastern District of New York, said in a statement.
Walters, an HPD employee since 1998, has been suspended without pay, according to HPD Commissioner Mathew Wambua. The developers and contractor named in the indictment have been disqualified from doing work with HPD and the agency is in the process of determining whether they have any active contracts with the firms in question.
"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," Wambua said in a statement.
He said the allegations against Walters are not "representative of the great work" HPD does in providing affordable housing.
Also indicted was Walters' high school friend, real estate developer Stevenson Dunn. In a recorded conversation, Dunn called Walters "greedy" for demanding $75,000 from him before eventually receiving $25,000.
According to the indictment, Dunn, and his partners, attorneys Lee Hymowitz and Micheal Freeman, along with real estate developers Sergio Benitez, Robert Morales and Angel Villalona, demanded kickbacks from general contractors after receiving HPD contracts. One general contractor received a $100,000 kickback demand when attorneys Hymowitz and Freeman allegedly issued fake legal bills.
Dunn also demanded a kickback from a developer of a project that Walters was overseeing. Walters was aware of the extortion attempt and Dunn threatened violence to collect the bribe, according to federal authorities.
If convicted, the defendants face 20 years in prison.