As we have discussed before, whistleblowers perform a critical role in our communities by helping to stem fraud and corruption. As with cases like the one below, had a whistleblower timely intervened, it could have potentially saved taxpayers millions of dollars, valuable time and resources, and a whistleblower may even have been entitled to one-third of any monies recovered by the government from the corrupt corporation or individuals.
Not every case forms the basis for a whistleblower claim under a statute or applicable law – call our New York Whistleblower Attorney to learn your options and the strength (or weakness) of your potential claims. Not every case is the same and initial missteps can be fatal to claim. Learn your rights before you take any action.
Reported HUD fraud scheme in Mount Vernon
This case is discussed based on press reports. A former city official in Mount Vernon and her romantic partner reportedly were found guilty of conspiracy and mail fraud charges by a federal jury in White Plains on November 30, 2015 for diverting approximately $1.2 million in U.S. Department of Housing and Urban Development (HUD) funds managed by the city official to her partner’s businesses. Both the city official and her romantic partner had denied any wrongdoing.
Constance Post, formerly the Mount Vernon planning and community development commissioner and executive director of the Mount Vernon Urban Renewal Agency, and Wayne Charles were each convicted on one count of conspiracy to commit mail fraud and one count of mail fraud. Each charge carries a maximum prison sentence of 20 years.
Charles was convicted at an earlier trial of making false statements to federal agents who interviewed him about the case in 2006 and faces a maximum five-year prison sentence for that felony.
Prosecutors said Post and Charles conspired to steer a computer services contract with the Mount Vernon Urban Renewal Agency to a company secretly owned by Charles, who had no computer expertise, no employees and no ability to perform under the contract. Post hired and directed people to work for Charles’s company. The contractual arrangement, which continued from 1998 to 2002, cost the Mount Vernon and HUD more than twice the cost of the computer services if the hired employees had worked directly for the city.
Post also steered hundreds of thousands of dollars to Charles beyond what she was authorized to spend by city’s urban renewal agency board.
In a separate fraud scheme, Charles also concealed his computer services contract with the city to obtain a $500,000 loan of HUD funds through the Mount Vernon Urban Renewal Agency for renovations to a property in the city.
In 2003, Post also concealed the existence of the loan and Charles’s failure to repay $250,000 to the Mount Vernon agency after another lender in 2003 repaid half of the loan as required. Two years later, Post retroactively recorded the unpaid balance with the city agency as federal investigators were examining its financial records. Charles soon after made a few payments on the loan, the bulk of which remains unpaid, according to prosecutors.
There are many types of claims that may form the blueprint for a whistleblower action – not just the kind as discussed above – there are many different applicable statutes – state and federal. Contact our office if you have any knowledge or information about fraud or other wrongdoing and want to learn your rights.
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