The previous head of one of many largest homeless shelter networks in New York was arrested Wednesday on federal costs that he pocketed lots of of hundreds of {dollars} in kickbacks from contractors working together with his group.
The arrest of the manager, Victor Rivera, the previous president and founding father of the Bronx Mother or father Housing Community, got here lower than two months after a New York Occasions investigation discovered that he had engaged in a protracted sample of sexual abuse and monetary impropriety that stretched again virtually a decade. Mr. Rivera was fired by the nonprofit final month, following The Occasions report.
The group is considered one of dozens of nonprofit teams that function the town’s $2 billion system to shelter the homeless, whose numbers have reached document ranges.
Prosecutors on Wednesday stated that Mr. Rivera had enriched himself for years by accepting bribes from firms doing work for his group, in accordance with papers filed in Federal District Court docket in Manhattan.
Mr. Rivera, 61, laundered among the cash via entities he managed, together with a consulting firm owned by considered one of his kinfolk, and used it to pay down his mortgage, in accordance with prosecutors.
On the similar time, Mr. Rivera faces one other prison inquiry that started in response to The Occasions’s report: The Bronx district legal professional’s workplace opened an investigation after 10 girls, together with homeless girls staying in Mr. Rivera’s shelters, accused him of sexual assault or harassment. Two girls stated he had coerced them into performing oral intercourse. “No person tells daddy no,” Mr. Rivera informed a type of girls, an worker, in accordance with an account she gave to the police.
The Occasions discovered that the Bronx Mother or father Housing Community paid two workers who had complained about Mr. Rivera’s sexual conduct a complete of $175,000 in settlements that prohibited them from talking publicly about their allegations.
Mr. Rivera helped begin the Bronx Mother or father Housing Community in 2000 and steered it because it grew to change into a serious metropolis contractor. Since 2017, his group has obtained $274 million in metropolis funding to run virtually 70 websites of homeless housing. Because the coronavirus swept via the homeless inhabitants, the town gave his group one other $10 million to supply rooms the place contaminated individuals may isolate and get better.
Because the funding got here in, Mr. Rivera’s private fortune additionally grew. He drove a Mercedes-Benz leased by his group and purchased a house with a heated swimming pool north of New York Metropolis and one other home within the Poconos.
The Occasions investigation discovered Mr. Rivera had used the nonprofit for his private monetary acquire. He mingled the nonprofit’s funds with for-profit housing firms he owned, steered profitable contracts to buddies and supplied jobs to a number of members of his household, the investigation discovered.
“Victor Rivera sought to leverage his place because the C.E.O. of a nonprofit into a really a lot for-profit scenario for himself,” the U.S. legal professional in Manhattan, Audrey Strauss, stated in a press release. Federal prosecutors carried out the investigation collectively with the town Division of Investigation.
At an preliminary court docket look on Wednesday, Mr. Rivera pleaded not responsible to costs of conspiracy, trustworthy companies wire fraud and cash laundering and was launched on bond. The prosecutor, David Abramowicz, stated that Mr. Rivera’s lawyer stated his shopper wished to attempt to cooperate with the federal government “in its investigation and prosecution of others.” He supplied no further particulars about an ongoing inquiry or what info Mr. Rivera may present.
Mr. Rivera’s lawyer, Harlan J. Protass, declined to remark. A spokesman for the Bronx Mother or father Housing Community didn’t reply to a request for remark.
As homelessness has soared in New York Metropolis in recent times, the town has entered into contracts with dozens of nonprofit organizations that run shelters and supply companies. However officers have struggled to get rid of conflicts of curiosity and self-dealing in a lot of these teams. Ten of the town’s 70 nonprofit operators have been flagged for critical administration or monetary improprieties, however all of them proceed to obtain funding.
Metropolis investigators have examined one of many metropolis’s largest suppliers, Acacia Community, which was discovered to have steered hundreds of thousands of {dollars} to a safety firm tied to high nonprofit officers. Town sued one other shelter supplier, Childrens Neighborhood Providers, final yr after accusing executives of fraud, bid-rigging and different monetary misdeeds. Federal prosecutors and metropolis investigators have investigated that group.
After The Occasions disclosed allegations about Mr. Rivera’s conduct, Mayor Invoice de Blasio stated in early February that the town would rent an outdoor auditing agency to conduct a sweeping assessment of the nonprofit organizations offering companies for the homeless.
A spokesman for Mr. de Blasio stated Wednesday that the town is within the means of hiring an outdoor group to look at the shelter suppliers, however didn’t present additional particulars concerning the standing of the audit.
In court docket papers, federal prosecutors supplied some element about how Mr. Rivera employed the nonprofit to learn himself via bribery.
One entity that subleased property to the Bronx Mother or father Housing Community wrote checks for “consulting charges” to an organization owned by considered one of Rivera’s kinfolk, prosecutors stated. The charges had been in reality kickback funds that Mr. Rivera then used to pay down the mortgage on his dwelling, court docket papers stated.
Mr. Rivera was accused of nepotism and conflicts of curiosity in 2017 by a whistle-blower who gave info to the town Division of Social Providers, which oversees homeless shelters, and the town positioned his group on a particular watch listing.
Nonetheless, Mr. Rivera continued to search out methods to learn himself and his associates, The Occasions discovered.
Final yr, as an illustration, the Bronx Mother or father Housing Community awarded $184,000 in upkeep contracts to a pal of Mr. Rivera who additionally had carried out work at considered one of Mr. Rivera’s private buildings within the Bronx, in accordance with metropolis contracting information and an insurance coverage certificates. Mr. Rivera’s group additionally steered hundreds of thousands of {dollars} in lease funds to an organization known as City Residences Corp, which is owned by his onetime enterprise companion.
William Ok. Rashbaum and Benjamin Weiser contributed reporting.