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Hotel Owners Paid by NYC to Run Homeless Shelters Being Probed by Federal Prosecutors

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Federal prosecutors in New York City are said to be investigating the business practices of hotel-owning brothers Stewart and Jay Podolsky.

 

The Wall Street Journal is reporting that the brothers whose legal entities New York City are alleged to have paid tens of millions of dollars to house the homeless since 2014.

 

“Prosecutors have examined whether the brothers’ company, Amsterdam Hospitality Group, hid money in attorney escrow accounts in a potential attempt to evade taxes,” the Journal said. “They have also asked whether the brothers overbilled subcontractors for repairs and services, then diverted extra funds into shell accounts or received perks from those subcontractors, including renovations to their personal residences, according to the people.”

 

According to The Real Deal, “the brothers’ company has received tens of millions of city dollars to house the homeless over the last five years, in Manhattan hotels like the Aladdin Hotel, the Apollo Hotel and the Ellington Hotel, sources told the Journal. Records show the City paid $5.4 million in the fiscal year 2018 alone to house homeless people at the Aladdin, near Times Square.”

 

A recent Journal piece on the Aladdin, a property that is controlled by the brothers, noted that “Like some other city shelters, it is a source of neighborhood controversy. Today, it is one of a number of current and former hotels that serves as a stopgap measure for New York City’s overburdened shelter system. From fiscal years 2015 through 2019, payment records show, the city’s Department of Homeless Services paid more than $27 million to house homeless adult families—typically couples or a parent and adult child—at the Aladdin.”

 

The Jewish Voice has reported thoroughly on the controversy surrounding housing the homeless in city hotels. Less than a year ago we noted, “Over the past year, the number of homeless people that the city is putting up in hotels has skyrocketed to a record high of more than 11,000, which taxpayers are footing the exuberant bills for. This translates to nearly one in six of the 61,000 people being housed by the city, are being put up in pricey hotel suites. And it is not just rundown outer borough inns that these people are staying at. Last week,

 

The Post reported that 120 homeless have taken up residence in Midtown Manhattan’s historic Wellington Hotel near Billionaires’ Row, in addition to several others housed in rooms at the luxurious New Yorker and Excelsior hotels. Obviously, it cost a lot more to house people in hotels over shelters. On average the city is charged a whopping $222 per person per night at hotels, with social services included, while it cost $150 to house someone at a shelter.”

 

For New Yorkers who wish to help the homeless, the city’s web site, www1.nyc.gov, offers this notice: “The 2019 Homeless Outreach Population Estimate (HOPE) will take place on Monday, January 28. You can volunteer to survey homeless individuals by registering and completing the online orientation. On January 28, from 10 PM to 4 AM, teams of volunteers will canvass selected areas of the five boroughs and count the number of individuals sleeping on the street and in other public spaces, including the subway. To volunteer, you must be 18 or older and willing to work from 10 PM to 4 AM, regardless of the weather. You will be trained before going out with your team.”

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