Family Affair: Feds Indict Arroyo Relative for Housing Scams


Just as all eyes were on the mighty state senator Pedro Espada Jr. and his many escapades, along comes some strong competition for Bronx Schemer of the Week Award.

A freshly unsealed indictment this morning by the U.S. Attorney for the Southern District, based on a joint city-federal probe, charges the grandson of state assemblywoman Carmen Arroyo with embezzling some $180,000 from a Bronx housing group long controlled by the Arroyo clan.

Richard Izquierdo Arroyo (pictured, with assemblywoman Arroyo), president of SBCC Management Corp., which manages a pair of HUD-subsidized buildings providing low-income housing in the South Bronx, allegedly went to town with an American Express Platinum credit card. Also charged is Margarita Villegas, SBCC director.

According to the complaint, the pair, along with an unnamed relative, ran up tabs worth $15,000 at clothing stores including Ralph Lauren, Tommy Hilfilger, and — our favorite — Promgirl. They also ran up bills of $66,000 with fine dining at the likes of Portofino,  Venice Restaurant, Tavern on the Green, and — go figure — IHOP. Another $48,000 went for airfares and hotels in San Juan, and Brooklyn (!). Another $34,000 was plunked down for car rentals, garages, and parking tickets in Puerto Rico, the Dominican Republic and around the Empire State.

Politically, the most intriguing part of the indictment cites $9,000 from SBCC Management funneled into the state assembly campaign of an official designated as “Assembly Member #1.” As it happens, state Board of Elections records show that SBCC donated $9,000 to the Friends of Assemblywoman Carmen Arroyo during precisely that period of time. Assembly Member #1 also got $3,800 worth of flooring work from SBCC in March, 2007. Carmen Arroyo served as Executive Director of SBCC from 1978 to 1994 when she became the first Puerto Rican woman elected to the state assembly, according to her official bio.

Then there’s $2,300 worth of airfare that SBCC picked up for another unnamed pol referred to only as “City Council Member #1.” Maria del Carmen Arroyo, daughter of the assembly woman, is currently a city council member and former official of SBCC where her sister, Iris Arroyo works.

The Daily News reported last year that Maria Arroyo had funneled $82,500 in city council discretionary funding to SBCC. Photo via New York State Assembly.