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2 Get Prison in Public Housing Scandal

Monday, July 8, 2013

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Two former ranking officials with the nation’s largest municipal public housing agency will each serve 18 months in prison in a growing corruption scandal that netted them thousands of dollars in bribes.

The latest casualties of the wide-ranging FBI investigation are Michael Provenzano, 49, of Massapequa, NY, former director of Construction Services for the New York City Department of Housing Preservation and Development (HPD); and Luis Adorno, 48, of Scarsdale, NY, who was the supervisory construction project manager of the agency's Department of Architecture and Construction Engineering.

Provenzano was sentenced May 21 to 18 months in prison, followed by three years of supervised release. He was ordered to forfeit the $30,000 he received in bribes and was fined $5,000, the FBI reported.

Luis Adorno Michael Provenzano
nydailynews.com (left); nypost.com (right)

Luis Adorno (left) and Michael Provenzano will each serve 18 months in prison. Each had faced 10 years.

Adorno was sentenced June 19 to 18 months in prison, followed by 300 hours of community service, for his corruption conviction. He also was ordered to forfeit $100,000 in bribery money to the government and was fined $10,000.

Both sentences were imposed by U.S. District Judge Nina Gershon in Brooklyn. Both defendants had faced up to 10 years in prison.

'Provenzano Was for Sale'

HPD is responsible for implementing Mayor Michael R. Bloomberg’s New Housing Marketplace Plan, a multibillion-dollar initiative to finance 165,000 units of affordable housing for half a million New Yorkers by the close of the 2014 fiscal year. The agency is the largest municipal developer of affordable housing in the United States.

From January 2007 through December 2009, authorities said, Provenzano solicited and received $30,000 in bribe payments from a contractor who had extensive construction contracts with HPD.

In exchange for the bribes and some alcohol, Provenzano leaked to the contractor confidential HPD inspection reports that documented the number of workers at a given work site.

"The contractor was regularly and illegally employing additional workers at different work sites and paying them less than the legally required prevailing wage," the FBI said.

"With these leaked inspection reports, the contractor was able to conform his invoices to match the reports, thereby avoiding detection by HPD for his illegal conduct in paying those additional workers less than the prevailing wage."

New Housing Marketplace Plan

HPD is implementing Mayor Bloomberg’s multibillion-dollar New Housing Marketplace Plan, aiming to build 165,000 units of affordable housing by the close of FY 2014.

FBI assistant Director in Charge George Venizelos said: “By his admission, Provenzano was for sale. For a fee, he provided information that benefited a contractor rather than serving the interests of the city, his agency and the public.”

Adorno: 'The Bribe that Keeps on Giving'

Until his arrest in June 2012, Adorno was responsible for personally inspecting HPD construction projects and for supervising other inspectors.

During 2008 and 2009, the FBI said, a contractor who worked on several HPD construction projects paid Adorno what amounted to a $100,000 bribe for Adorno’s help in getting the contractor additional work with the housing agency.

"The bribe was structured in a sophisticated manner to ensure that actual cash did not pass through Adorno’s hands," the FBI reported.

"Rather, the contractor paid $100,000 to a real estate developer who was developing several HPD projects, and in return for the $100,000, the real estate developer agreed to give Adorno a 30 percent equity stake in the developer’s company."

U.S. Attorney Loretta E. Lynch, who prosecuted the case, said Adorno had "agreed to put his finger on the scale in favor of a contractor who paid him $100,000 in bribes."

HPD housing

New York City's Department of Housing Preservation and Development (HPD), the largest municipal developer of affordable housing in the U.S., is the focus of a growing corruption scandal.

"By receiving payment in the form of an equity stake in a real estate development company, Adorno sought to create the bribe that would keep on giving," Lynch said.

Continuing Investigation

Provenzano and Adorno, who both pleaded guilty in October, are the sixth and seventh individuals convicted in the ongoing case, which involves racketeering conspiracy, fraud and bribery related to the development of public housing. Three additional defendants are awaiting trial.

"I knew my actions were wrong, and I deeply regret them," Provenzano said, weeping, at his guilty plea, the New York Daily News reported.

Provenzano's sentence was the first imposed in the scandal. Four real-estate developers and one other former HPD official have pleaded guilty to a variety of crimes in the case.

Three additional defendants await trial.


Tagged categories: Business operations; Commercial contractors; Construction; Enforcement; Government contracts; Laws and litigation; Residential contractors

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