In February of this year, the federal prosecutors in the southern district cooperated with multiple law enforcement agencies to arrest 70 current and retired employees of the New York City Housing Authority (NYCHA), accusing them of taking bribes from small contractors over the past 10 years by abusing their authority in overseeing government building maintenance projects. On July 10, one of the Asian defendants, Jaime Lan, pleaded guilty, admitting to one count of accepting bribes and agreeing to pay a $27,000 fine. The sentencing is scheduled for October 17.
According to the indictment, 57-year-old Lan received over $10,000 in bribes during his tenure at the Housing Authority from 2016 to 2021. For example, in July 2016, while in charge of non-competitive orders at a government building in Manhattan, he received 10% bribes from contractors on the contract amounts, with each contract typically being $3,000 and the average bribe amount being $300. From January 2019 to September 2020, the same contractor received at least 24 non-competitive contracts at the government building, with Lan receiving around $400 in bribes per contract.
Normally, for small maintenance contracts below $10,000 in New York City Housing Authority, public bidding is not required. Building managers or assistant managers can choose contractors themselves, and after the work is completed, they sign off on the completion certificate before NYCHA pays for the project. However, non-competitive orders, although simplifying the process, also provide opportunities for illegal activities.
There are a total of 70 defendants in this case, who are accused of collectively soliciting over $2 million in bribes over 10 years, involving contract amounts of $13 million. The government buildings involved in the case exceed 100 buildings across the five boroughs, which represent more than a third of all 335 government buildings. Following the exposure of the case, the Housing Authority stated that they would change their procedures by centralizing small maintenance projects previously overseen by individual supervisors to prevent any further incidents of individuals exploiting their power for personal gain.