NEW YORK CITY—Derek Broomes, 72, the former president and CEO of Harlem Congregations for Community Improvement, a non-profit housing organization, on Monday pled guilty in federal court to one count of embezzling hundreds of thousands of dollars from a federally funded program. The crime carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss resulting from the offense. Broome agreed to pay back $203,408.80 plus further restitution.
Harlem Congregations for Community Improvement is a faith-based, non-profit organization that develops and provides low-income housing in Harlem. In 2002, Broomes became the CFO and in 2011, he became the president and CEO. Prior to working at HCCI, Broomes worked as a deputy commissioner in New York City's Human Resources Administration and for three years at the city's Department of Investigations as the deputy inspector general and an investigator.
Since 1999, HCCI participated in the federally funded Scattered Site Housing Program, in which it received federal dollars to subsidize rents for low-income people with HIV and AIDS. The program rules require organizations keep SSHP funds in separate accounts used exclusively for program costs. During 2014 and 2015, HCCI received more than $3 million in SSHP funds.
The US Attorney's Office in the Southern District of New York alleged that as the president and CEO of HCCI, Broomes stole hundreds of thousands of dollars by charging personal and unauthorized expenses to a corporate credit card. Using the credit card, he routinely paid for personal car repairs, medical bills, electronics, clothing and gifts.
Between March 2013 when the HCCI credit card was issued and March 2015 when it was cancelled, Broomes charged $394,145.65 to the card. During an internal audit, the non-profit determined that over $200,000 of the charges were personal or not authorized. DNAInfo had reported that HCCI fired Broomes in April 2016.
To cover these expenses, Broomes has diverted federal dollars from the housing program. As a result, HCCI was often unable to make rent payments for the program's apartments on a timely basis and tenants began to receive eviction notices by landlords who were owed months of back rent.
The US Attorney's office claimed that to conceal his crime, Broomes submitted and caused others to submit false and fraudulent reimbursement forms, certifying the money was used for HCCI program expenses including rental payments.
His sentencing is scheduled for April 26, 2018 before Chief Judge Colleen McMahon.
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Betsy Kim
Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
