Oceanside lawyer charged in fraud

An Oceanside lawyer was arrested on Oct. 6 on charges of a racketeering, bribery and extortion scheme allegedly being run by an assistant commissioner of the New York City Department of Housing Preservation and Development (HPD).

According to the United States Attorney’s Office Eastern District of New York, Wendell Walters, HPD’s assistant commissioner for New Construction, along with Oceanside real estate attorney Lee Hymowitz and others, were arrested in connection with corruption schemes that earned the defendants between $1 million and $2 million in kickbacks and bribes over a decade and cost HPD hundreds of thousands of dollars in overpayments to developers on projects in Brooklyn, Queens and the Bronx.

During his time at HPD, Walters oversaw various programs that were aimed at enabling private property managers, developers and non-profits to build and renovate buildings to provide affordable housing. New York City regulations allow HPD to award projects to private developers, who could then hire general contracts to do the actual construction.

According to the indictment against him, Walters allegedly accepted about $600,000 in bribes from contractors and real estate developers in exchange for awarding them HPD contracts.

Hymowitz — a business partner of Walters’ friend, real estate developer Stevenson Dunn — after being awarded contracts by HPD, allegedly demanded kickbacks from contractors in exchange for awarding them construction work. In one case, in an attempt to cover up more than $100,000 in kickback payments, Hymowitz and another attorney, Michael Freeman, allegedly set up a fake legal retainer agreement with the payer.

“New Yorkers relied on these defendants for the safe haven of affordable housing,” said Loretta Lynch, United States Attorney for the Eastern District of New York. “As detailed in the government’s indictment and other court filings, the defendants corruptly lined their own pockets by stealing millions of dollars in public funds dedicated to affordable housing. In doing so, they undermined HPD’s mission and cheated the taxpayers, who ultimately fund that mission.”

Hymowitz is being charged with five counts of wire fraud conspiracy, money laundering conspiracy and money laundering. He plead not guilty to the charges. If convicted of the most serious charges, each defendant could face a maximum sentence of 20 years in prison. The government is also seeking to forfeit at least $22 million that was awarded to contractors through the scheme.

A lawyer representing Hymowitz did not return calls for comment.