The city’s Department of Department of Housing Preservation and Development (HPD) said this week the agency is looking to make improvements in its oversight of how Mitchell Lama housing units are doled out.
HPD’s comments came in response to the bust this week of three Luna Park Housing Corporation officials, who allegedly took bribes from ineligible applicants so they could buy high-demand and low-priced cooperatives at the Coney Island Mitchell Lama complex.
Signed into law in 1955 and named for its sponsors, then State Sen. MacNeil Mitchell and Assemblyman Alfred Lama, the Mitchell Lama program is a subsidized affordable rental and cooperative housing program for low- and middle-income residents.
HPD is the government agency charged with oversight on how Mitchell Lama housing units are doled out.
Luna Park, sharing the name with the boardwalk amusement area, is a five-building Mitchell Lama complex consisting of studio, one, two, and three-bedroom apartments housing about 6,000 people.
Earlier this week, Anna Treybich, 71, Irina Zeltser, 66, and Karina Andriyan, 38, all of Coney Island were arraigned on charges including conspiracy and grand larceny for allegedly accepting a total of $874,000 in bribes from January 20003 to May 2019 to let out the apartments.
Treyhich is the president of the Luna Park board of directors, Zeltzer is the treasurer and Andryan is the office manager.
“These defendants allegedly conspired to corrupt the process by which eligible prospective tenants could have access to affordable housing in Brooklyn, and then used their illegal proceeds to fund lavish lifestyles. Their alleged greed cheated people who were entitled to apartments that instead went to those willing to pay bribes,” said Brooklyn District Attorney Eric Gonzalez, who conducted the joint investigation with the city’s Department of Investigation (DOI) and U.S. Department of Housing and Urban Development (HUD).
According to the indictment, applicants for the housing units fell into three categories: internal applicants seeking to move from one apartment into another apartment; external applicants who had no prior ownership or occupancy at Luna Park; and succession applicants who lived with owners and sought successor ownership rights. Internal and external application waiting lists were supposed to be maintained in the order in which they were received.
As Board of Director members Treybich and Zeltser, along with Andriyan were tasked with maintaining all waiting lists. HPD is tasked with approving and processing all applications for apartments.
Anyone seeking to purchase an apartment had to submit various supporting documents including income verification and in the case of successor applicants, birth and marriage certificates and other documents proving that the applicant lived in the apartment for at least two years and had a familial relationship with the occupant who relinquished the apartment.
According to the indictment, Luna Park’s apartments were sold at prices significantly below market value and therefore were in high demand. The defendants allegedly abused their positions at Luna Park by accepting bribes in amounts ranging from $10,000 to $120,000 from applicants for apartments in Luna Park.
In exchange for the bribes, the defendants allegedly prepared and submitted to HPD for approval false, forged and fraudulent documents, giving those who paid the bribes priority over otherwise eligible applicants. The defendants allegedly collected a total of $874,000 in cash bribes, involving the transfer of 18 apartments, over the course of the scheme, for which they were indicted. The fair market value of the 18 apartments was approximately $5 million in total.
It is alleged that the defendants identified applicants willing to pay cash bribes through word of mouth or by relying on people to recruit applicants willing to pay cash bribes.
It is alleged that, because HPD relied on the applicant screening and application review conducted by the Luna Park management office and routinely approved all applications submitted by the management office, the defendants deceived HPD into approving the applications of bribe-paying applicants by creating false, forged and fraudulent applications and supporting documents and submitting them to HPD for final approval.
An HPD spokesperson said the agency has been cooperating with a DOI investigation into charges pertaining to alleged fraudulent documentation, including application materials, and improper waitlist management.
“The details of the investigation make it clear that this was a very sophisticated operation, which is why have we worked closely with DOI and the DA’s office, and we will continue to collaborate with them to explore any other legal options as we move forward,” said the spokesperson.
The spokesperson said the agency is also working with the DOI and HPD collaboratively on process improvements for the Mitchell Lama program.
“HPD takes its oversight of the Mitchell-Lama program extremely seriously. We will continue to work closely with the DOI on their ongoing investigation, and have already instituted several changes to strengthen our processes to ensure that there is fair access to this vital source of affordable housing for New Yorkers.” said the spokesperson.
Stephen Witt contributed to this story.
