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Operator of Shelter Where 2 Girls Died Last Month Hit With $532K Tax Lien

By James Fanelli | January 9, 2017 7:45am
 Frank Boswell, the executive director of the Bushwick Economic Development Corp., said he wasn't Boswell when approached by a DNAinfo reporter. He later ran back into his office when asked about his nonprofit's tax problems.
Frank Boswell, the executive director of the Bushwick Economic Development Corp., said he wasn't Boswell when approached by a DNAinfo reporter. He later ran back into his office when asked about his nonprofit's tax problems.
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DNAinfo New York/James Fanelli

BUSHWICK — The nonprofit that operated a Bronx shelter apartment where a malfunctioning radiator killed two toddlers has been a tax deadbeat for years and was hit with a $532,898 lien last month.

But records show it hasn't disclosed its fiscal woes to its main funder — the city.

The state Department of Taxation and Finance hit the nonprofit, Bushwick Economic Development Corp., or BEDCO, with the tax lien on Dec. 7 — the same day that 1-year-old Scylee Vayoh Ambrose and 2-year-old Ibanez Ambrose were killed by scalding steam from a radiator inside their bedroom.

BEDCO has had tax problems for years, but it has kept the city in the dark about them, records show. Such omissions can lead to the loss of contracts or even criminal charges for false statements, according to city rules.

 1-year-old Scylee Vayoh Ambrose and 2-year-old Ibanez Ambrose were killed after a radiator burned her and her sister inside 720 Hunts Point Ave. Wednesday, Dec. 7, 2016
1-year-old Scylee Vayoh Ambrose and 2-year-old Ibanez Ambrose were killed after a radiator burned her and her sister inside 720 Hunts Point Ave. Wednesday, Dec. 7, 2016
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DNAinfo/Eddie Small and Facebook

The city requires its contractors to disclose any tax liens and judgments they have had.

BEDCO, which has gotten at least $116 million in contracts since 2004, has said in disclosure forms to the city that it hasn't had tax liens, records show. 

In the past two years alone, the Internal Revenue Service hit the nonprofit with three federal liens for a total of $246,748 in unpaid payroll taxes, records show.

It took BEDCO six months to get square with the IRS on one of the liens. BEDCO satisfied the other two liens inside of a month. 

The IRS also hit BEDCO with a $3,503 lien in 1995 and a $9,923 lien in 2010. BEDCO paid back the 1995 lien three years later. It paid back the 2010 liens two months after it was issued.

The state also hit BEDCO with a lien in 2002. As a result, Bank of New York foreclosed on a BEDCO-owned building in Bushwick, according to city property records.

The building, on Cooper Street, was sold in receivership in 2004. The nonprofit still has its headquarters at the spot, but it now leases the space.

The nonprofit has for years operated several homeless shelters and cluster housing sites in Brooklyn and The Bronx and gets nearly all of its funding from the city's Department of Homeless Services.

For example, BEDCO received $26.4 million from the city agency in 2014, according to the nonprofit's most recent tax filing.

As a contractor with the city, BEDCO must disclose information about its organization to the Mayor's Office of Contract Services. One city questionnaire asks contractors if they have been hit with tax liens in the past five years. 

BEDCO filled out this questionnaire in 2008, 2010, 2011 and 2014. Each time, the nonprofit answered "no" to having any liens in the past five years. However, the 2010 federal tax lien and the state's 2002 lien would have fallen within the reportable time period. 

BEDCO's executive director, Frank Boswell, declined to comment on the tax problems.

When a DNAinfo New York reporter approached him outside BEDCO's headquarters, he initially denied he was Frank Boswell. He then ran back into his office and said, "I have nothing to say."

Boswell, who earns $194,213 a year and drives a brand-new Cadillac, has had his own tax problems with Uncle Sam. The IRS has hit him with six liens between 1995 and 2013 for a total of $230,374. Records show that he has paid back those debts, most of them in 2015.

Lauren Gray, a spokeswoman for the Department of Homeless Services, said the agency has been looking into BEDCO's contracts.

"As part of our ongoing review of shelter providers over the past several months, we are reviewing all aspects of this vendor, which has had contracts with the city for a number of years," she said.

"As a general matter, contracts cannot be registered when there are outstanding tax matters.”

DNAinfo New York previously reported that the executive deputy commissioner at the Department of Homeless Services was repeatedly warned in emails and phone calls about BEDCO being a bad actor which didn't pay rent on buildings it leased and dragged its feet on fixing housing code violations.

Real estate firms Marcy Tower LLC and Pulaski Development LLC, which lease several Brooklyn buildings to BEDCO as shelters, said in court papers in December that the nonprofit owes about $5 million in back rent.

DNAinfo also reported that the city's Department of Investigation looked into BEDCO in 2010 for how it allocated funding it received from Homeless Services and the city's Human Resources Administration. BEDCO said the matter was resolved and deemed unfounded.

DNAinfo also reported that a lawsuit once accused Boswell of trying to extort a business partner and bribe workers at the Department of Homeless Services.

The Department of Homeless Services did not immediately respond to a request for comment about the tax liens.