BUSHWICK — The nonprofit operating the shelter apartment where two young girls were killed by scalding steam has been accused of acting like the mob, was the subject of two city Department of Investigation probes and was sued for being a deadbeat renter who tried to hide its debts from city funders, court and city records show.
Bushwick Economic Development Corp., or BEDCO, and its executive director, Frank Boswell, were sued in 2008 by a former business partner in a city-funded shelter operation who claimed Boswell tried to shake him down for money and gave kickback payments to employees of the city Department of Homeless Services.
The plaintiff, Peter Mione, said in a racketeering lawsuit filed in Manhattan Supreme Court that when he refused to pay Boswell, he received phone messages from an unknown caller threatening to kill him.
Meanwhile, BEDCO — which receives millions of dollars annually from the city to provide apartments for homeless families — has twice been scrutinized by city investigators.
In 2010, city investigators interviewed Boswell and Bushwick’s fiscal officer, Keith Walker, over the methodology in which their nonprofit allocated contract funding from the Human Resources Administration and Homeless Services.
The nonprofit made the disclosure about the investigation in a required filing with the Mayor’s Office of Contract Services. BEDCO said in the disclosure that “the matter was resolved and deemed unfounded.”
DOI did not respond to a request for information about the probe.
Even after the probe, Boswell and his nonprofit continued to have problems handling its finances.
In 2014, real estate firm ENY Plaza LLC won a $1.86 million judgment against BEDCO for failing to pay rent for several months on a Brownsville apartment building it leased with city funding to house 200 homeless men, women and children, according to Brooklyn Housing Court records.
ENY Plaza LLC began a years-long battle to collect rent arrears by suing BEDCO in 2011. The two sides initially reached a stipulation in 2013 where the nonprofit agreed to pay $468,968 in back rent.
A few months after the agreement, Boswell was trying to secure a new contract with Homeless Services to continue operating its cluster housing operation at the East New York Avenue building. Cluster housing is where the city pays a contractor to provide apartment units in privately owned buildings.
Samuel Fleischman, a managing partner at ENY Plaza, said in a December 2014 affidavit that Boswell asked him to write a document outlining the future rents due under the stipulation to show to Homeless Services. When Fleischman asked why he just didn’t show the city agency a copy of the stipulation, Boswell said he didn’t want them to see the sizeable debt BEDCO still owed ENY Plaza.
“Mr. Boswell informed me that he did not want to show DHS the current amount of arrears due,” Fleischman said in the affidavit.
They went back to court in 2014 after BEDCO didn't abide by the stipulation of paying the back rent and won the judgment, court records show.
Bushwick Economic Development Corp. has been receiving city funding to provide shelter services since at least 2000, city records show.
Most recently Homeless Services awarded the nonprofit two shelter services contracts worth a total of $19.6 million on July 1, 2016.
The awards came after Bushwick was the subject of a scathing DOI report in March 2015 about the city’s shelter system and use of cluster site housing. The report flagged Bushwick for operating of a poorly maintained and unsafe cluster site at an East 174th Street building in The Bronx.
Scylee Vayoh Amrose, 1, and Ibanez Ambrose, 2, were killed by a radiator spewing scorching steam on Wednesday while taking a nap in their bedroom in a cluster site apartment that Bushwick runs in Hunts Point.
Boswell, who was paid $194,000 as Bushwick’s director in 2014 and drives a brand new white Cadillac, did not respond to multiple requests for comment. Sources said he met with Homeless Services staff on Thursday.
Homeless Services did not respond to a request for comment.
In his racketeering lawsuit, Peter Mione said he had been approached by the owner of two Brooklyn buildings, 85 Stanhope St. and 115 Stanhope St., to lease the properties and try to get a Homeless Service contract to provide cluster housing.
Mione agreed and submitted a proposal to the city in 2003 to provide 27 furnished apartments to homeless families. The city turned him down, but Calvin Pitter, the the deputy chief contracting officer for Homeless Services, suggested they partner with Boswell and BEDCO, according to the lawsuit.
They did and won a contract in June 2004, the lawsuit said. Mione said shortly thereafter the extortion started.
“Bedco through Boswell began demanding moneys separate and apart from any contractual relationship and indeed began a shakedown whereby [Mione] had to pay certain moneys to Boswell,” the lawsuit said.
The lawsuit said that a certain percentage of the money was to go to Homeless Services employees as a kickback.
Mione decided not to comply with the demands and severed ties with Boswell. Thereafter he received a threatening phone call, according to the lawsuit.
Homeless Services also terminated Mione’s contract in 2006. Mione also named the agency as a defendant in the lawsuit.
Karen S. Smith, the judge hearing the case, dismissed some of the lawsuit’s claims in September 2010, but she allowed Mione to go forward with the racketeering accusations.
Mione’s lawyer, Steven Masef, declined to comment on the case but said that the lawsuit was no longer active and had never been resolved. Mione could not be reached.
ENY Plaza filed new claims in its ongoing housing court case with Bushwick in October of this year. It said that the nonprofit now owed $4.7 million.
In an affidavit, Fleischman, ENY Plaza’s managing partner, said that in the last two years a judge had lowered the judgment amount awarded in 2014 from $1.86 million to $715,672. Bushwick paid off the reduced judgment in November 2015, but Fleischman said the nonprofit still owes the $4.7 million for back rent, unpaid real estate taxes, Environmental Control Board violations and other fees.
Bushwick “seeks to have the court view it as a tenant advocate when, in reality, [Bushwick] has received millions of dollars of city and state funds to maintain the building but has failed to address the habitability concerns of its clients,” Fleischman wrote in his Oct. 19 affidavit.