City orders investigation into crooked homeless services provider that fooled them for five years

THE CITY

 The city on Wednesday filed a complaint in Manhattan Supreme Court seeking a temporary receiver for one of New York’s largest homeless service providers — an act officials referred to not just as unprecedented, but as a source of pride.

They had diligently built a case alleging fraud against Childrens Community Services — a firm that’s reaped nearly $500 million in recent years — and were now taking action to protect both taxpayers and the homeless, officials said.

“We’re proud that our staff saw something and said something,” said Isaac McGinn, a Department of Social Services spokesperson.

But the city’s own court filings show that warning signs about the firm began to emerge as early as September 2015.

A review of those filings and other documents by THE CITY reveal a nonprofit formed in 2014 by a former hotel executive that quickly expanded into a multi-million dollar operation that provided nearly 2,000 units of housing for the homeless.

But the company kept getting contracts to help with the city’s homeless crisis even as concerns over its operations grew. The suspicions culminated in raids this week by city and federal officials amid the city’s accusations of fraud, bid-rigging and bogus vendor headquarters

 From the fall of 2015 into the following spring, the Department of Social Services received invoices submitted with repeat and duplicate charges, the filings show.

In April 2018, a piece by New York Nonprofit Media told the story of CCS under the headline, “How an obscure nonprofit became one of NYC’s largest contractors.”

The story noted that the founder of Childrens Community Services, Thomas Bransky, was a hotelier with no background in homeless services when he launched the nonprofit in early 2014 — and raised questions about whether the company had a physical administrative office.

A copy of Branksy’s resume THE CITY obtained through a public records request shows his previous titles — all at Chicago hotels — were account manager, sales manager and front desk manager.

A message left at a phone number he submitted in documents to the city wasn’t returned.

In May 2018, city social service officials’ concerns about “CCS’s suspicious subcontracting, invoicing and billing practices” prompted them to notify the city’s Department of Investigation.

This week, DOI and federal prosecutors executed search warrants of addresses linked with the firm and its vendors, the court filings show.

Questions sent to DOI late Wednesday about the length of the investigation weren’t immediately answered.

Read this as you wait for the feast

Below is the letter that former DOI Commissioner Mark Peters sent to the City Council about his dismissal by de Blasio.

STATEMENT FROM DOI COMMISSI... by on Scribd

DeBlasio fires guy that was investigating him

From the NY Post:

The mayor’s official pretext is that Peters had behaved “in a manner indicating a lack of concern for following the law” by improperly trying to replace the special schools investigator and supposedly lying to a de Blasio aide.

The real issue is surely that he’d done his job too well — better than the mayor expected when he installed his former campaign treasurer at the Investigations Department.

Peters exposed rampant mismanagement and systemic dishonesty at the Housing Authority, uncovered significant scandals at the Administration for Children’s Services and blew the whistle on how top mayoral aides lifted deed restrictions so that a Lower East Side nursing home could be sold to a real-estate developer for luxury condo.

And the firing comes as DOI has been investigating political interference in the Department of Education’s “probe” of Jewish religious schools that don’t teach their students non-religious subjects.

In that and other “matters now being pursued by DOI,” Peters told City Hall last month, “the mayor himself and/or his staff, are potentially a subject of investigation.”

Talk about fishy timing.

BDB caught off guard by raid

From the NY Times:

Two days after Mayor Bill de Blasio signed a sweeping civil settlement with the federal government over New York City’s public housing system, federal and local investigators seized documents and other items Wednesday from a Queens office of the city’s housing authority.

The investigators questioned housing officials, cloned computer hard drives and took the city-issued cellphone of a senior manager overseeing lead abatement, according to two people briefed on the matter.

Then they returned on Thursday.

The surprise visit rattled officials and pierced the veneer of common purpose presented by Mayor de Blasio on Monday when he announced that the city would commit at least $1.2 billion in extra funding for needed repairs in New York City Housing Authority buildings. With the agreement with the U.S. attorney in Manhattan, Geoffrey S. Berman, the city avoided a civil trial that would have examined longstanding problems at the authority, including failure to test for hazardous lead paint over several years.

“We agreed to create a common game plan,” Mr. de Blasio said.

The searches were conducted by the city’s Department of Investigation, the inspector general for the Department of Housing and Urban Development and the Environmental Protection Agency, and they appeared to catch top officials at the housing authority off-guard. The investigators arrived at the building on 49th Avenue in Long Island City without a search warrant, relying instead on the city agency’s power to directly access city records without a warrant, according to one of the people briefed on the raid.

Homeless behavior is causing problems all over the city

From the Daily News:

The Daily News spent three months looking at life in neighborhoods with large numbers of shelter beds, documenting the cost these residents pay by shouldering a disproportionate share of the city’s collective burden.

The News found they often face a wide variety of challenges: verbal harassment and physical assaults; stoops used as bathrooms; outdoor flowerpots used to hide knives; prostitution and drug dealing; newly arrived gentrifiers unable to tell the difference between some longtime homeowners and shelter residents; real estate brokers warning that property values fall when new shelters are announced nearby; and a pastor who lost half his congregation after a parishioner was raped by homeless youths from a nearby shelter.

From the Daily News:

All along Queens Boulevard the Department of Homeless Services has placed homeless in one hotel after another. Residents believe two more are coming soon based on building permits touting new “hotel/apartment residences.”

Watchful residents complain about a history of complaints over incidents involving these hotels-turned-shelters, from prostitution to physical assaults.

Between 2013 and 2017, there have been 809 calls to 311 about homeless assistance in the two zip codes with the bulk of the hotels: 11377 and 11373.

Those two zip codes far outstrip all others in Queens for calls about the homeless.

On Jan. 4, the Department of Investigation revealed prostitution and drug arrests at 34 hotels where the city places homeless families. Twelve of those hotels are located in Queens, the report said.

Exhibit No. 1 cited by frustrated locals is the Pan Am Hotel.

Four months after the mayor’s promise to cut back on shelter-hotels, the city re-upped its contract with the nonprofit that manages a family shelter in the Pan Am — extending it through 2023.

Longtime homeowner Sally Wang, a member of Elmhurst United, a group pushing to close the Pan Am, said the new contract with DHS is just the latest insult to arrive from City Hall.

“What we’re finding is a lot of homeowners are selling out because of the shelter,” she said. “They don’t want to be near the shelter. They’re selling to investor owners who don’t live here and that starts the deterioration of the whole neighborhood. And it's worse now that the contract is in for six years.”

Violence at shelters has been redefined by the de Blasio administration.

And here's what Billionaire's Row has to look forward to.

BDB knew about the NYCHA mess for quite some time

From the Wall Street Journal:

New York City Mayor Bill de Blasio has known the city’s housing authority wasn’t complying with lead-inspection regulations since last year, his office said Sunday.

In a report issued last week, the city’s Department of Investigation said the New York City Housing Authority submitted false claims to the federal government showing it had conducted lead-paint inspections when the required work hadn’t been done for years.

The mayor was first informed of “the possibility of non-compliance” in March 2016, his office said.

Mr. de Blasio, a Democrat who was re-elected to a second term on Nov. 7, has said “operations executives” were responsible for the lapses.

The housing authority notified City Hall that the agency wasn’t in compliance with local laws in April 2016 and with U.S. Department of Housing and Urban Development rules in July, according to de Blasio spokeswoman Olivia Lapeyrolerie.

“As part of the agency’s response, NYCHA inspected every apartment with kids under 6 where there may have been lead paint in 2016 and will do so again by the end of 2017,” Ms. Lapeyrolerie said.

Meanwhile, all this is costing us taxpayers a ton of cash.

NYCHA lied about inspecting for lead paint

From PIX11:

The New York City Housing Authority failed to conduct lead paint safety inspections for four years beginning in 2013, according to a new report by the city’s Department of Investigation. The DOI further alleges NYCHA then lied about the inspections to Federal housing authorities.

Whitestone supervisor busted for fake certificates

From the Queens Tribune:

A construction safety supervisor from Whitestone was arrested on Nov. 3 for allegedly possessing fake safety training certificates, the city’s Department of Investigation announced on Monday.

Andreas Tsamos, 49, was in charge of safety for a renovation project at the Fulton Houses Community Center in Manhattan when he was apprehended for the alleged fake documents.

On Nov. 2, DOI investigators discovered that an emergency fire exit door at the Tsamos’ job site was locked from the outside, preventing workers from leaving in the event of a fire. Additionally, there was no fall protection guardrail system installed where work was being done or on a scaffold that was installed at the site.

Following the discovery of the safety issues, investigators returned to the site on Nov. 3 to ask Tsamos, who works for Gem Quality Corporation of Brooklyn, to produce his safety credentials. As a site safety representative at Fulton Houses, Tsamos was required to hold a 30-hour safety certification from a training center approved by the United States Occupational Safety and Health Administration (OSHA).

According to DOI, Tsamos provided two certificates: a 10-hour approved OSHA course and a 30-hour approved OSHA course. The listed training company was “360Training.com,” but when investigators contacted the company, it allegedly confirmed that no individual with the defendant’s name had completed training courses on the date of the certificates. Additionally, the company said that all certificates bear the name of the courses that were taken. Tsamos’ certificates allegedly did not list the name of the courses.

It's who you know

From Gotham Gazette:

The Queens Democratic Board of Elections commissioner, who in the past has come under fire for conflicts of interest, is quickly becoming one of the highest earning recipients of Queens court patronage, Gotham Gazette has learned.

In 2014, Jose Miguel Araujo, then the newly elected BOE president, was fined $10,000 by the city's Conflicts of Interest Board (COIB) -- the maximum penalty for nepotism -- because he gave his wife Rita Patron Araujo a job as a temporary clerk between 2010 and 2012.

The fines issued against Araujo and other BOE employees followed a scathing 2013 Department of Investigation (DOI) report, which found the agency to be rife with nepotism, incompetence, and overall dysfunction.

"The imposition of the maximum legal fine on the Board’s President should send a powerful message that this conduct will not be tolerated,” DOI Commissioner Mark Peters said in a statement at the time of the fines.

Despite the incident, Araujo was renominated for the position by the Queens County Democratic Party and reconfirmed for a four-year term by the City Council in 2016. Since then, his law practice has become one of the top earners of Queens Court patronage doled out by the Queens Surrogate’s Court and Queens Supreme Court, raising questions about his impartiality as a BOE commissioner and other conflicts of interest this outside business might present.

Before he became a commissioner, from 2005 through 2007, Araujo earned significant payments from the Queens Surrogate’s Court, which settles estates of Queens residents who die without wills. The appointments required Araujo to act as a “guardian ad litem,” to advocate for individuals incapacitated by age or mental illness. After Araujo joined the BOE in 2008, the appointments stopped. Several payments trickled in again in 2011, but after the 2014 COIB fine, the appointments escalated from both Surrogate’s Court and also Supreme Court, which gave Araujo work as a court evaluator or counsel for guardians of incapacitated individuals.

Of the roughly $140,000 Araujo earned from Queens court appointments since 2005, half of the money -- $69,513 -- flowed to Araujo’s practice in the last two years, according to records obtained from the New York State Unified Court System.

Air pollution inspector arrested for accepting bribe

From DNA Info:

A city air pollution inspector was busted for soliciting a bribe from a Brooklyn construction site after threatening to impose a stop work order, officials said Wednesday.

Sean Richardson-Daniel, 53, was inspecting 222 Pulaski St. on Dec. 4, 2015 when he told an informant he believed was a property representative that he would issue the stop work order unless he received $15,000 in cash, even though there were no active Department of Environmental Protection complaints against the property, according to the Department of Investigation.

Employees say Mark-Viverito demanded discrimination at NYCHA

From the Daily News:

City Council Speaker Melissa Mark-Viverito pressured the Housing Authority to remove the black manager of a Bronx housing development and replace her with a “Spanish manager,” former and current NYCHA workers told the Daily News.

Officials were so eager to make the Speaker’s wish come true that they turned to the city Department of Investigation to help “find something” on the manager.

Mark-Viverito made her ethnic-specific demand during a July 30, 2015, emergency meeting with several NYCHA officials held in her Bronx office, one of the meeting’s participants told the Daily News.

One of NYCHA’s top executives, Senior Vice President for Operations Brian Clarke, participated in that meeting via speakerphone — and later pressured subordinates to address Mark-Viverito’s demand because of the “cultural sensitivity” of the development’s tenants.

The Speaker began the meeting by asking how NYCHA dealt with Spanish-speaking tenants at the Mill Brook Houses in Mott Haven, according to the participants.

Mark-Viverito then confronted Allison Williams, the black manager of Mill Brook who is not fluent in Spanish, according to Williams and her boss, Sibyl Colon, NYCHA’s then-director of Optimal Property Management Department.

Williams says she told Mark-Viverito that — per NYCHA policy — she would rely on a “language bank” of on-call translators when dealing with non-English-speaking tenants.

Colon and Williams say Mark-Viverito responded with anger.

“She started asking me: ‘What do you do when you have to deal with the Spanish residents?’ I don’t speak Spanish. I said I used the language bank. She said — in her words — ‘That's unacceptable.’ I just sat silent.”

Colon, who was also at the meeting, says Mark-Viverito turned to her and stated, “You’re not hearing me. I want a Spanish manager.”

Smoking gun memo revealed

From Bowery Boogie:

The Department of Investigation, whose scathing report last week proved a mishandling by the de Blasio Administration in the Rivington House deed fiasco, released evidence late yesterday that the Mayor’s office deliberately covered up crucial information regarding the ongoing investigation.

Specifically, a deal memo from July 2014 that weighed the pros and cons of allowing the sale of the Rivington House nursing home and potential deed lifting that required use of the facility as a nonprofit. Take a look at “Option 2″ of the document (go to link),”transfer property to another nonprofit.” The advantage to keeping it so was listed as “maintaining property under city oversight and creates needed housing in a high value neighborhood.” But the drawback stated was “no revenue” presumably for the city.

The Allure Group purchased the Rivington House from VillageCare in 2015 for $28 million, paid the city $16.1 million to lift a restrictive deed, then sold the property to developers Slate Property Group, China Vanke Co., and Adam America Real Estate for $116 million earlier this year.

meanwhile, de Blasio was cracking jokes about it while attending the DNC.

City Council wants deed restriction review to fall under ULURP

From DNA Info:

Local politicians say the city should make developers looking to modify deed restrictions go through the city’s thorough, months-long process for reviewing proposed zoning changes — a change they say is needed to prevent more community facilities from being turned into luxury condos after the loss of Rivington House.

Manhattan Borough President Gale Brewer and Councilwoman Margaret Chin on Tuesday penned a letter to the City Planning Commission asking officials to subject any deed restriction changes to the city’s Uniform Land Review Procedure (ULURP), which the letter calls “the city’s gold standard of public review.”

The officials argue that the current review process around properties saddled with deed restrictions is lax and unstructured, pointing to the Department of Investigation’s damning report on the city’s lifting of the deed restriction on Rivington House — a former nursing home for HIV/AIDS patients that is now slated for a luxury condo conversion after the city lifted a deed restriction that would have kept it a nonprofit healthcare facility.

If you see something, say something

From the Observer:

In case New York City’s employees need a refresher—and it seems like many might—the Department of Investigation would like to remind them: bribery and corruption are illegal.

As the city grapples with several ethics scandals, The Department of Investigation would like to remind city employees that bribery and corruption are illegal. corruption-fighting agency is rolling out a Just-Say-No style aimed for the world of waste, fraud and corruption: plastering the sides of city buses and the radio airwaves with advertisements reminding people not to get sucked into the seemingly ever-present temptation of graft.

The campaign began this weekend with ads on the sides of city buses showing money in a mousetrap proclaiming: “Bribery & Corruption Are a Trap. Don’t Get Caught Up. Report It.” (The mouse trap is a bit of an interesting choice, given that people who report crimes are often referred to as “rats.”)

Charity with ties to shady pol investigated

From DNA Info:

City investigators have opened a probe into a Queens nonprofit that has ties to disgraced ex-state Sen. Shirley Huntley and other elected officials, sources said.

The city Department of Investigation began in May looking into the finances of the St. Albans nonprofit Clergy United for Community Empowerment and into its executive vice-president and CEO, the Rev. Ernestine Sanders, according to sources.

The nonprofit bills itself as providing health and mental health services to HIV individuals and their families.

The group, whose board members include influential clergy from Southeast Queens, also holds political sway and its endorsement is coveted by both candidates running for office and elected officials.

Councilman I. Daneek Miller, who represents St. Albans, directed $63,438 in discretionary funds to Clergy United in fiscal year 2016 to run domestic violence initiatives, records show. In all, the nonprofit received nearly $219,000 in discretionary funds from the City Council that year, records show.

Miller declined to comment on the investigation.

Huntley, when she was a state senator, also steered $75,000 in state funds to Clergy United between fiscal years 2007 and 2010, according to a Politico article in 2012.

Huntley pleaded guilty in 2013 to mail fraud charges for stealing $87,000 in taxpayer money that went to an educational nonprofit she founded. She served 10 months in federal prison.

Housing project residents ripping off the system

From the Daily News:

A slew of public housing tenants ripped off the taxpayers by under-reporting income to inflate their benefits, the city Department of Investigation charged Friday.

Over the last few weeks, 17 tenants have been charged with stealing public funds, including 12 who deliberately hid income-producing husbands and other relatives to collect more federal rent subsidies.

Two tenants even managed to pull this off despite the fact that their husbands worked for the city, according to DOI Commissioner Mark Peters.

One tenant got the federal subsidy, known as Section 8, without reporting that her husband was the super in the privately owned Section 8 building where they lived.

HRA workers stole welfare and food stamp benefits

From the Daily News:

A pair of corrupt city bureaucrats ripped off more than $2 million in food stamps and public assistance over the last five years — even using stolen benefits to buy Red Bull in bulk and resell it, the city Department of Investigation announced Tuesday.

Two Human Resources Administration workers and 11 co-conspirators were arrested early Tuesday and charged with recruiting dozens of welfare recipients and others to game the system out of millions of taxpayer dollars between 2008 and 2013.

Cherrise Watson-Jackson, 44, an HRA supervisor, allegedly created fake electronic benefit transfer cards to generate $120,000, which was used to buy cases of Red Bull from BJ's Wholesale Club, according to charges filed in Manhattan federal court.

Watson-Jackson and her crew then resold the high-octane drink to small local grocery stores and split the proceeds, DOI alleged.

Another HRA employee, Petronila Peralta, 51, was caught allegedly generating more than $600,000 in bogus cash assistance benefits to 140 individuals between 2008 and 2011.

Peralta even paid recruiters to give welfare recipients cash to use their account information to generate fraudulent benefits, DOI said.

DOI arrests inspector for filing false report

From PIX11:

A city building engineer was charged with deeming a West End Avenue building façade safe -- where a 2-year-old girl was fatally struck by falling bricks in May 2015.

Officials with the Department of Investigation say Maqsoon Faruqi, 55, of Jackson, N.J., falsely filing a façade inspection report of a West End Avenue apartment when he had actually never visited the building.

The 2-year-old girl, Greta Greene, died after being struck in the head by chunks of brick that fell from the eighth floor of a luxury nursing home -- The Esplanade -- as she sat with her grandmother on a bench outside.

The grandmother, Susan Frierson, 60, suffered leg injuries.

The New York City Department of Buildings immediately hit the owners of The Esplanade with two complaints -- after the incident -- for failing “to maintain the property in a safe and code-compliant manner.”

The owners did file a façade inspection report, as required by law, with the Department of Buildings in 2011. At the time, Faruqi, who conducted the inspection, pronounced the conditions safe.

Faruqi filed his inspection report stating that he directly supervised the inspection and reviewed the proper documents to assess the façade’s structural integrity, writing, “All conditions identified in previous reports as requiring repairs have been corrected.”

The DOI later discovered that Faruqi never visited the site nor had he seen The Esplanade's maintenance records or inspection reports.

Crackdown on fake OSHA cards

From the Daily News:

With the number of construction-related deaths on the rise, city investigators are quietly showing up at job sites and arresting workers with fake safety training cards, the Daily News has learned.

Workers are required to take safety courses run by the U.S. Occupational Safety & Health Administration (OSHA) to reduce accidents at job sites, but over the years there's been a growing problem with workers blowing off the courses and using fraudulent OSHA cards to claim they're trained.

Since the beginning of the year, more than 20 workers with allegedly bogus OSHA cards have been busted at city construction sites, sources familiar with the crackdown said.

The sweep — carried out by the Department of Investigation and the Buildings Department — comes as construction fatalities in New York City jumped to 18 in the last federal fiscal year, up from 12 the year before.

The latest arrests took place Oct. 17 with five workers led away in handcuffs at two sites where housing is going up in Queens and the Bronx.

Members of DOI, the Buildings Department and NYPD detectives arrested the five for possessing what they say are fake OSHA cards. Another 19 workers were pulled off the two job sites because they had no OSHA cards at all.

DEPARTMENT OF BUILDINGS CRACKING DOWN ON LICENSES OF REPEAT OFFENDER CONSTRUCTION PROFESSIONALS

First Ever Suspension of Contractor Registration for Multiple Construction Violations

More Discipline Coming for Construction Professionals that Endanger Public

Following his appointment at the Department of Buildings in August of 2014, Commissioner Chandler immediately set out to reform how the agency identifies, coordinates enforcement actions between agencies and disciplines problem construction professionals. Following the creation of a Risk Management Office, the development of a comprehensive construction professional discipline database and the recent release of an Industry Code of Conduct last month, the Department accomplished another priority outlined in its transformative Building One City initiative – the implementation of new proactive regulatory enforcement efforts through the suspension of a contractor’s registration for receiving multiple immediately hazardous violations over a 24 month period. The disciplinary action – part of an overall strategy of imposing greater accountability and integrity within the construction industry – comes following multiple cases in recent months where unscrupulous construction professionals have cut corners during projects to the detriment of workers or public safety.

Following an excavation failure on April 6, 2015 at 19 9th Avenue, the Department of Buildings in coordination with the Department of Investigation began reviewing the violation history of Kenneth Hart of Harco Consultants Corp. The Department conducted an administrative review of the contractor’s work history that resulted in the suspension of Mr. Hart’s General Contractor registrations on July 20, 2015 due to a pattern of risky behavior on his job sites. In addition, all sites using Harco as the contractor were issued stop work orders. The Department of Investigation in coordination with the Manhattan District Attorney launched a criminal investigation which resulted in today’s arrests of those working for Harco, and these individuals will now face charges. The coordination between the three agencies has resulted in administrative disciplinary hearings and criminal indictments that will help to make New York City safer, and the construction industry more accountable for misconduct.

Kenneth Hart was served on July 20, 2015 with a 33 page administrative discipline petition charging that over a 24 month period between January 1, 2013 and December 31, 2014 he accrued 30 violations deemed immediately hazardous to the public on 9 jobs sites throughout Manhattan, Brooklyn and Queens. The charges range from a failure to put in place proper safeguards to protect the public and workers during ongoing construction to cutting corners on jobsites by not following approved work plans.

“It should be made clear with today’s arrests, as well as the suspension of Mr. Hart’s registrations, this Department will not tolerate conduct by construction professionals that puts workers or the public in danger, and will use every enforcement tool provided in the NYC Construction Codes to discipline bad actors,” said Buildings Commissioner Rick Chandler. “Targeting and suspending this contractor’s registration due to an extensive violation history is a significant step forward in meeting the Department’s goal to enhance our regulatory efforts over problem construction professionals. The industry should take notice; an attitude that violations are simply the cost of doing business will no longer be tolerated, the Department will be seeking to suspend or revoke licenses for those that repeatedly refuse to abide by the law.”

Under the NYC Administrative Code the Department is granted a wide array of disciplinary enforcement actions for construction professionals who fail to comply with the NYC Construction Code and the various other laws the agency is tasked with enforcing. In addition to the issuance of violations, the Department can place stop work orders on jobs, assess civil penalties, suspend and revoke licenses and where necessary refer cases for criminal enforcement agencies for prosecution.