Former Co-op City Board President Sentenced To Jail Time For Accepting Kickback Payments
MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced that IRIS HERSKOWITZ BAEZ, the former President of the Board of Co-Op City in the Bronx, New York, was sentenced today for accepting approximately $10,000 in kickback payments in exchange for her assistance in steering a Co-Op City painting contract worth approximately $3.5 million.
BAEZ, 59, a resident of the Bronx, was sentenced by United States District Judge RICHARD J. SULLIVAN to six months’ imprisonment and one year of supervised release. In addition, BAEZ was ordered to forfeit $10,000. According to the Indictment filed in Manhattan federal court and statements made during BAEZ’s guilty plea and sentencing proceedings:
Co-Op City is a New York State Mitchell-Lama housing cooperative located in the Bronx, New York. As a Mitchell-Lama development, Co-Op City was established for the purpose of providing affordable housing for middle-income residents. To effectuate that purpose, Mitchell-Lama developments such as Co-Op City charge rents that are considerably lower than the rents that qualified residents would have to pay for comparable housing on the open market.
The New York City Housing Authority ( “NYCHA” ) is a New York City agency responsible for, among other things, supervising a Section 8 rental assistance program, which program is regulated and fully funded by the United States Department of Housing and Urban Development ( “HUD” ). As part of the Section 8 Program, HUD pays subsidies, typically in the form of vouchers, for people to live in private housing.
Neither HUD nor NYCHA place any restriction on how Co- Op City can spend the federal subsidies. Accordingly, the housing cooperative was permitted to use the federal funds for capital improvements such as renovations to, and painting of, apartment units. New York State, however, imposes certain regulations on how Co-Op City may spend money on capital improvements, such as requiring — for any job in excess of $50,000 — that Co-Op City put the work out for bid, memorialize the agreement with the bid winner in a formal contract, and subject the contract to approval by the New York State Division of Housing and Community Renewal ( “DHCR” ), which regulates the housing development.
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