By Michael Musto
By Capt. James Van Thach told to Jonathan Wei
By Kera Bolonik
By Michael Musto
By Nick Pinto
By Steve Weinstein
By Michael Musto
By Michael Musto
When prosecutors said that Sean "Puffy" Combs offered his driver a $40,000 pinky ring to take the fall on a weapons charge after his melee in a Manhattan nightclub, the tabs were shocked. But perhaps Combs was just trying out a time-honored New York business move: The Bribe. In a town where a palm is likely to get as much grease as any squeaky wheel, the only thing odd about Combs's alleged offer was the rapper's apparent foray into a world usually reserved for government employees and their charges. Who can forget the municipal scandals of the Koch administration, complete with bags of cash delivered in public urinals and a politician so ensnared in corruption he stabbed himself to death with an Ecko kitchen knife in his Queens home?
Last year alone, the city's Department of Investigation (DOI) nabbed more than two dozen people for allegedly taking or demanding bribes totaling more than $60,000. No doubt, the individual amounts pale in comparison to the loot Combs supposedly profferedfew gratuities can be measured in karat weightand in this case, unlike the scandals of the '80s, no one is dead. But the DOI stings give a peek at the way business is sometimes done here and a culture that seems to invite random acts of kindness in hopes of buying an inspector's blindness.
The bribes range from a fire department employee who tried to shake down a job applicant for a $25 Costco gift certificate (the job seeker happened to be a cop) to $20,000 that a Gristede's vice president allegedly offered a city finance official to fix a $200,000 tax bill. In the Bronx, a welfare worker is charged with taking $600 to open a fraudulent case. Owners of various Manhattan restaurants tried to bribe health inspectors to ignore roaches, mouse droppings, and bare-handed food preparation.
Paymentsusually cashwere made in many ways. Money was stuffed into shirt pockets, crammed into envelopes, left under car seats. In one case, DOI says a $100 bill was flung into the car of a transportation inspector checking out a Queens homeowner's defective sidewalk. It's "coffee money," the owner explained.
Varied as the origins and destinations of the bribes are, one trend stands out: No sector is better represented than housing. More than half of the 1999 cases somehow involve real estate, whether it's a landlord slipping a couple thousand bucks to a housing inspector, or an inspector giving a homeowner the choice of paying up or getting written up, or the incredible scheme of a pair of Queens entrepreneurs who, prosecutors say, tried to swindle the city out of eight buildings owned by the Department of Housing Preservation and Development (HPD).
The trend continues: Each of the four bribery cases filed so far this year involves property owners, including one Brooklyn landlord who actually went to a city office to pay a bribe. The Voicetakes a look at five of real estate's more noteworthy bribery cases.
You've got to wonder what Manhattan landlord Paljo Gazivoda was thinking in late 1998 when he asked a housing inspector to come have a look at his decrepit building at 504 West 159th Street. According to DOI's investigation, Gazivoda had requested what HPD calls a "dismissal request inspection," whereby a landlord can legally pay the agency $300 to proclaim a building free of violations, provided, of course, that the claim is true. When the HPD inspector found that violations in fact remained, DOI says Gazivoda made a less formal move: He tried to stuff a cash-filled envelope into the inspector's shirt pocket.
The inspector refused the money and alerted DOI to the landlord's overture. Weeks later, DOI sent an undercover agent ready to accept Gazivoda's generosityand to record their conversations. According to a DOI memo, "Gazivoda placed a $200 bribe in the [undercover agent's] pocket," and proposed a bigger deal: Gazivoda told him he owned three other buildings with more than 700 HPD violations. He was willing to pay to have them cleared.
Over the course of two meetings, Gazivoda forked over $2000 in bribes. In his last payment, on December 1, the landlord apparently felt festive: He proffered an additional $500 for Christmas, and, according to the DOI investigation, "referred to friends who also own buildings, and mentioned the possibility of doing further business" with the inspector. Gazivoda was arrested in March. Two months later, he pleaded guilty to giving unlawful gratuities. Neither he nor his lawyers returned calls.
Now, a year later, Gazivoda's buildings (some of which he owns with his wife, Leze) have taken a turn: Before his arrest, HPD counted 866 violations among his four properties; a stunning 715 were immediately hazardous, including exposed electrical wiring, defective pilot lights on stoves, uncapped gas pipes, and inadequate heat and hot water. The buildings boast a pared-down 722 violations, with 114 considered immediate threats.
A tour of the Gazivoda portfolio reveals halls that are freshly painted, and on one particular February day, heat appeared sufficient. But problems are obvious: Feces cover the interior landing at the roof level of the 159th Street building where Gazivoda first met the DOI undercover agent. At 529 West 158th Street, a man lurking in the stairwell directed a visitor to the top landing, where needles and bloodstained tissues were strewn next to a sliced-down beer can blackened from cooking crack. In the courtyard, a refrigerator was impaled on an iron fence, as if it had been chucked off the roof.
"Here we have people smoking marijuana on the landing, and I ask them to move because it comes into our apartment," says a tenant in a Gazivoda building at 559 West 188th Street. "They're tough kids and they tell me to mind my own business, that it's not a big deal, but it worries me because I have two young kids living here."
For his sentence, Gazivoda paid a $1000 fineless than half of the amount he paid "inspectors." At that rate, bribery could be calculated as just the cost of doing business.
A Newly Forged Friendship?
Toma Dushevic and Nicoletta DiBari were divorced on December 22, 1997. But the Queens pair apparently thought that even though their marriage had failed, their business partnership would soar. It seems they were wrong. From October 1998 until July 1999, prosecutors say, the pair went on a swindling spree, stealing no fewer than eight city-owned buildings and bribing an undercover agent to clear hundreds of thousands of dollars in back taxes on the properties. Along the way, they made such ridiculous mistakes that they got caught. They now face charges from both the Brooklyn D.A. and the city's law department.
"The thought that these people would dare to be criminals and be so stupid is beyond me," says Ken Knuckles, a former city commissioner whose name was used in Dushevic and DiBari's scheme. "Their ineptitude is laughable."
Dushevic and DiBari's plan to take over the city properties was intricate, involving not only an unwitting former commissioner but also a relative who says he was duped and a corporation that officials say was dissolved in 1982. According to a felony complaint from the Brooklyn D.A., Dushevic filed fake deeds that put him or his business, Malsia Corporation, in charge of the buildings. In fact, the buildings are the property of HPD because their original owners long ago abandoned them. Together, the propertiesall residential, mostly boarded up and dilapidated and scattered through Williamsburgare worth more than half a million dollars and carry a back-tax bill of more than $200,000. That's where Knuckles comes in.
Dushevic is charged with submitting at least four letters with Knuckles's forged signatures within seven days to the city finance department requesting that the taxes on the properties be removed. But an on-the-ball finance official noticed a few oddities. The writing was remarkably bad, including the indecipherable sentence "Although, Malsia Corporation is a Non-Profitable company where they were hired as an construction company . . . " and the closing line "If there is any assistance I can be, please write to me." And the stationery was wrong: Some letters were written in April 1999 on letterhead from the Department of General Services (DGS), an agency that Knuckles once headed, but that was renamed in 1996. Others were on stationery from HPD, where Knuckles had never been commissioner. In fact, Knuckles has not been commissioner of anything since December 31, 1993.
"How they were able to graft my name into this very cockeyed scheme is amazing," says Knuckles, who is now vice president of support services at Columbia University.
The bribery allegedly took place during several 1999 meetings in a Cadman Plaza coffee shop with a DOI undercover agent posing as a finance official. Dushevic met the agent first, in June, and allegedly paid him $2000 to have him remove the tax bill on five properties; DiBari met with him twice in July, saying Dushevic had referred her to him. She paid a total of $3420 to have taxes on three properties erased.
The pair was arrested on September 29, and in November, the D.A. charged Dushevic in a 42-count felony complaint, including charges of bribery, grand larceny, and criminal possession of false instruments. DiBari was charged with bribery and grand larceny. Those cases have been dismissed without prejudice pending action by a grand jury. Law enforcement sources say they "absolutely" intend to pursue the charges. Neither Dushevic nor DiBari nor their attorneys would comment on the cases.
Meanwhile, the city's corporation counsel has brought a civil suit against the pair and Malsia Corporation, charging that they forged a deed for one of the properties, a boarded-up four-story building at 224 Broadway in Williamsburg. Citing a pattern similar to the one in the criminal case, the city says the deed is allegedly signed by a deputy commissioner of DGS, noting the agency is long gone and that the person whose name was used was never a city employee. The case includes a fourth defendant, Doda Vucinic, who allegedly filed a fraudulent deed.
"It's very complicated, and I already told my lawyer I had nothing to do with that property," a frustrated Vucinic told the Voice. "Toma Dushevic is my wife's cousin, and they put my name on that thing and I didn't even know it myself. I've got nothing to do with it. Toma has done too many crazy things."
Public Housing, Private Deals?
An annual salary of $66,223 isn't bad for a 44-year-old man living with his wife and kids in New Jersey. But $75,623 is better$9400 betterand that's how much DOI and federal prosecutors say Emmanuel Lawrence shook down from a contractor he oversaw at the massive New York City Housing Authority (NYCHA), where Lawrence was chief of mechanical field operations for Manhattan and the Bronx. In what prosecutors suggest was a particularly touching moment, Lawrence allegedly leaned on a contractor, saying he needed the money to send his kids to summer camp.
Lawrence is one of three NYCHA supervisors charged in separate federal complaints for allegedly extracting nearly $20,000 in paybacks. He, John Honohan, and Christopher Bamberger were charged in early December. None of the defendants or their lawyers returned calls for this story.
All three men worked for the NYCHA department that each year oversees nearly $900 million in contracts for rehabilitation throughout NYCHA's massive public housing developments. During a three-year investigation, contractors wore wires and recorded conversations in which the bribes were arranged.
Both Honohan and Bamberger were supervisors in charge of ensuring that contractors met environmental standards. Both earned $55,945 a year. Honohan was in charge of Brooklyn, Queens, and his home borough of
Staten Island; he allegedly took $5500 in bribes for letting a contractor proceed with a door-replacement project without first performing a required pilot project. Honohan allegedly told the contractor he "would not have problems" with environmental compliance inspections.
Bamberger, who was in charge of Manhattan and the Bronx, allegedly accepted $500 from a contractor for the assurance that he'd throw any violation memo about the contractor "in the garbage." For $4500, prosecutors say, Bamberger offered to "fix" any problems the contractor might have and assured the contractor that there would be no problems related to asbestos testing. Prosecutors say that Bamberger instructed the contractor to leave $2500 in cash under the front seat of a van.
The complaint against Lawrence says that at one point, he grew frustrated when he told a contractor's employee that he had "money problems" and needed to pay off his American Express bill but "the employee had not understood." The employee's boss, a NYCHA contractor working on bathroom renovations in Manhattan developments, allegedly paid Lawrence $500.
In a later taped conversation with the contractor where another $500 changed hands, Lawrence suggested an old-fashioned Tammany trick: The contractor should overstate the amount of plaster used in renovations to win extra payments from NYCHA. (The legendary graft that emanated from the Tweed Courthouse relied in part on a plaster scheme.) At the same meeting, the complaint charges, Lawrence told the contractor that he needed $2200 for credit card bills. When the contractor paid that amount less than a month later, Lawrence suggested another ruse: The contractor could milk NYCHA further by inflating the value of change orders submitted on the job.
In April 1999, Lawrence allegedly told the contractor that he needed money to send his kids to summer camp, at a cost of $2100 per child. When the contractor balked, arguing that he had already forked over $8000, Lawrence backed off from his own personal Fresh Air Fund campaign, saying he "was not looking to get" the entire camp cost from the contractor.
Lawrence, Honohan, and Bamberger worked at NYCHA for 14, 10, and seven years respectively. Lawrence has been fired; Honohan and Bamberger have been suspended without pay.
An Inspector Hauls
When HPD inspector Anthony DeMichele approached the two-family home at 94-11 134th Street in Queens in early November 1998, owner Bhanmatie Singh must have been nervous. Just days earlier, someone had filed a complaint with the city's Department of Buildings (DOB) about a back deck Singh was allegedly building without a permit. So when DeMichele gave the owner a choicepay him cash or he'd report the violations, which he said would require Singh to go to court, pay fines, and hire an architectshe agreed to pay him $2000, according to a DOI press release.
DeMichele then insisted on a down payment on the spot or he'd write up the violations that day. Singh forked over $1000 in cash. Then she called DOI. When DeMichele returned the next week, Singh was wired for sound. She and DeMichele "had a conversation about HPD inspector DeMichele not reporting illegal rentals and not issuing housing violations," according to a complaint filed by the Queens D.A. Singh then paid DeMichele $500 in "pre-recorded buy money"bills that DOI marks to use as evidence of a bribe.
DeMichele was arrested in June. On January 20, he pleaded guilty to felony charges of receiving a reward for official misconduct in the second degree; a charge of third-degree bribe-receiving was dropped in exchange for DeMichele's plea. "He chose to accept a plea of guilty and get on with his life rather than be indicted in Supreme Court," says DeMichele's attorney, Steve Singer, adding that under the arrangement, neither he nor DeMichele were able to listen to the conversation Singh had recorded. Rather than face a possible seven-year jail term, Singer says, DeMichele will get probation and do community service. A DOB spokesperson says that a violation was written against Singh in November 1998 for doing work without a permit but was dismissed in June 1999.
DiMichele, 41, worked at HPD for 16 years and was terminated upon his arrest. He was one of three HPD inspectors in Queens who pleaded guilty within the last year to charges of accepting cash from property owners after DOI stings. The other two accepted payments of $200. Neither works for HPD anymore.
Trouble in Hooterville
Rats in the laundry room. Heatless days in winter. And a steady stream of customers coming to patronize the sex workers who had set up shop in a second-floor apartment. Such were the amenities that tenants of Robert and Katherine Chou were treated to in the couple's Hell's Kitchen tenement at 515 West 47th Street. Maybe that's why not one Chou renter interviewed was shocked to learn that Robert Chou has been charged with bribing an undercover agent who posed as a housing inspector, hoping to get a record of housing violations wiped clean.
"It doesn't surprise me at all," says a tenant who lived in the five-story building for three years, moving out in September 1999 after filth and freezing rooms forced her from the apartment where the Chous charged her and her roommates more than $1850 a month. "There were often notices up for inspections and we were like, I don't understand how they pass these things. I mean, we had to stay at other people's places because we had no heat for days in the dead of winter."
Robert Chou was busted after an August DOI sting, which the landlord himself had triggered two months earlier by allegedly trying to bribe a real inspector responding to an emergency complaint. When DOI sent an undercover agent posing as a housing inspector who read through a list of violations, including roach and vermin infestations and trash pileups in the basement, Chou allegedly tried to give him $300 in cash. The landlord was arrested on January 13. Neither Robert nor Katherine Chou or their attorneys responded to requests for comment.
While the West 47th Street walk-up looks squalid, tenants, typically young professionals with many roommates, pay more than $2000 a month to live in a building where a rat-filled basement turned garbage disposal into a sort of athletic event. "You could always hear rodents rummaging down there, so when you went to bring your garbage down, you'd make a lot of noise so you wouldn't see them," says former tenant Ted Kim. "Then you get to the top of the stairs, and kind of chuck it down. And run."
The Chous own more than a dozen buildings from Soho to Yorkville. City officials were drawn to Chou's West Side property not only by Robert Chou's alleged generosity to inspectors. Just three months after the DOI agent was "gifted" by Chou, a plainclothes vice-squad detective visited a second-floor apartment known as Hooterville, which doubled as a bordello. According to an affidavit filed in a lawsuit that the city brought against Katherine Chou, the detective was taken to a rear bedroom and offered intercourse for $180. In December, another undercover agent was offered fellatio for $120.
In court papers, Katherine Chou denied any knowledge of Hooterville, although former tenants say they brought the situation "to her attention more than once," including in writing.
On January 14, Katherine Chou settled the Hooterville suit by promising to evict the offending tenants. One day earlier, her husband had been arraigned on the bribery charges. He is due in court on the charges on March 29, and faces up to seven years in prison.
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