Former Mount Vernon Commissioner & Associate Guilty of Fraud

Former Mount Vernon Commissioner & Associate Guilty of Fraud 2

 

Preet Bharara, United States Attorney for the Southern District of New York, announced that Constance Post, former Commissioner of the Mount Vernon Department of Planning and Community Development as well as Executive Director of the Mount Vernon Urban Renewal Agency (“MVURA”), and Wayne Charles were found guilty today in White Plains federal court on charges stemming from their diversion of more than $1.2 million in federal funds from the U.S. Department of Housing and Urban Development (“HUD”) that were administered by the MVURA.

 

U.S. Attorney Preet Bharara said: “As the jury unanimously found, Constance Post abused her position of public trust to conspire with Wayne Charles to enrich themselves.  Their corruption victimized the citizens of Mount Vernon, HUD, and U.S. taxpayers.  Now, the defendants await sentencing for their crimes.”

 

As established by the evidence at trial:

 

Post and Charles, who had a romantic relationship, arranged to steer a computer services contract to a company secretly owned by Charles.  Using the name of a defunct computer services company that a friend had operated, Charles concealed from the City of Mount Vernon that he 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, which enriched Charles, between 1998 and 2002, but ultimately cost the City and HUD more than twice what it would have paid if the employees had worked directly for the City.  Post also disregarded the monetary restrictions placed upon her by the MVURA board that approved the computer services contract, and she steered hundreds of thousands of dollars to Charles beyond her authorization.

 

Separately, in connection with a $500,000 loan of HUD funds awarded by the MVURA Board to renovate property in Mt. Vernon, Charles, with the approval of Post, falsely stated that he had not used any other names, and falsely certified that he had no other business with the City of Mount Vernon and the MVURA.  In fact, Charles used several false names with the approval and assistance of Post in order to conceal his involvement with the computer services contract.  Then, after renovations were complete on the property in 2003, another lender, in accordance with the terms of the MVURA?s loan, repaid $250,000 of the loan, leaving an unpaid balance of $250,000.  Post took steps to conceal the existence of the loan and the fact that Charles still owed the MVURA the $250,000, ensuring that Charles was not required to repay the loan to Mount Vernon.  In 2005, when federal investigators were examining the MVURA?s financial records, Post retroactively recorded the unpaid balance of the Charles loan on the books of the MVURA.  Shortly thereafter, Charles made a few payments on the loan, which otherwise remains unpaid.

 

The evidence also established that, during the course of their scheme, Charles paid Post $30,000.

 

Post and Charles were each convicted of one count of conspiracy to commit mail fraud and one count of mail fraud.  Charles was also previously convicted at an earlier trial of making false statements to federal agents who interviewed him in 2006 about the subject matter of this case.

 

Sentencing is scheduled for March 1, 2016, before United States District Judge Kenneth M. Karas.  Post and Charles each face up to 20 years in prison on the conspiracy charge and up to 20 years in prison on the mail fraud charge of the Indictment.  Charles also faces up to five years in prison on the false statement charge.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

 

Mr. Bharara praised the joint efforts of the United States Department of Housing and Urban Development – Inspector General and the Federal Bureau of Investigation.

 

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Andrew Dember and Daniel Filor are in charge of the prosecution.

 

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