Investments Lending Real Estate

Ex-NJ mayor sent to prison for kickbacks involving HUD funds

Low-income housing developers provided money to Passaic mayor Alex Blanco

Prison jail bars

The former mayor of Passaic, New Jersey will spend the next two years in prison after being convicted of soliciting and accepting bribes from developers who wanted to build low-income housing in the city.

According to the U.S. Attorney’s Office for the District of New Jersey, a federal judge sentenced Alex Blanco to spend 27 months in prison for taking $110,000 in corrupt payments, much of which was money from the Department of Housing and Urban Development.

Blanco, who served as mayor of Passaic from 2008 through 2016, previously pleaded guilty to one count of soliciting and accepting corrupt payments in connection with City of Passaic business.

According to the U.S. Attorney’s Office, from 2010 to 2012, two developers sought to build eight low-income residential units on property they owned in Passaic. 

After the Passaic City Council and the Passaic Zoning Board of Adjustment approved the projects, Blanco dispatched an intermediary to approach the developers in July 2011.

According to court documents, Blanco’s intermediary told the developers that they were expected to provide a “sizable payment” to the mayor to ensure that the project would move forward.

Some time after that meeting took place, the Passaic City Council approved the release of $216,400 in HUD funds to the developers, money that was designated for use on the project.

Then, in early September 2011, Blanco arranged for a meeting with the developers where solicited and agreed to accept $75,000, the U.S. Attorney’s Office said.

The following day, Blanco met one of the developers in Clifton, New Jersey, and asked for the kickback in cash. Court document showed that the developer told Blanco that the developer brought signed, blank checks, which could be made out to whoever Blanco chose.

Blanco took those checks, which totaled $65,000, and had them filled in, arranged for them to be cashed, and pocketed the cash.

Then, approximately eight days later, Blanco had another meeting in Passaic with one of the developers, during which he solicited and accepted two additional checks totaling $40,000, proceeds that were also eventually provided to Blanco in cash.

Additionally, in March 2012, Blanco accepted cash from an additional $5,000 check solicited on his behalf.

In total, Blanco received  $110,000 in corrupt payments from the developers, and according to the authorities, much of that money came from the HUD funds that were released to the developers in 2011.

“Mayor Blanco admitted to aggressively soliciting and accepting illegal payments from developers, taking for himself federal money that was intended to help provide housing for some of the city’s poorest residents,” Acting U.S. Attorney Fitzpatrick said. “This case demonstrates that public officials who exploit their office for personal gain can expect to be thoroughly investigated and aggressively prosecuted.”

In addition to Blanco’s 27-month prison term, the judge also sentenced Blanco to three years of supervised release and ordered him to pay restitution of the full $110,000.

“Public corruption is one of the FBI's top priorities,” Special Agent in Charge Timothy Gallagher of the FBI Newark Division said.

“Today's sentencing of former Passaic Mayor Alex Blanco is indicative of how diligently the FBI and our law enforcement partners work corruption matters,” Gallagher continued. “We will continue to investigate allegations of public corruption thoroughly to ensure any person who misuses their public office for private gain is held accountable.”

Reprints

Services Guide

Comments powered by Disqus