Chinese Hotel Developer Arrested for Corruption in 50 Million Housing Funds Scandal

On Thursday, February 13, Weihong Hu, a 59-year-old hotel developer, was arrested in her Manhattan home for allegedly embezzling over $51 million in public funds during the COVID-19 pandemic emergency housing program. She was charged along with two others – Julio Medina, 64, executive director of a non-profit organization, and Christopher Dantzler, 49, CEO of a security company. The trio faced charges of conspiracy to commit wire fraud, honest services wire fraud, money laundering conspiracy, conspiracy to violate travel laws, and aiding commercial bribes using interstate facilities.

During the COVID-19 outbreak, New York City implemented an emergency transitional housing program to release and place some inmates in hotels, providing mental health support, security, job training, and food services to reintegrate individuals into society and prevent the spread of the epidemic in prisons.

In June 2020, the Mayor’s Office of Criminal Justice (MOCJ) of New York City signed a contract with Medina’s non-profit organization to manage the program. Over the following three and a half years, MOCJ allocated approximately $122 million to Medina’s organization, which partnered with multiple hotels to serve as reentry hotels under the emergency housing program.

However, prosecutors alleged that defendants Medina, Dantzler, and Hu conspired to corruptly enrich themselves by misappropriating millions of public funds through kickbacks and bribes during the COVID-19 crisis. They engaged in a corrupt scheme, diverting public funds for personal gain through false contracts and bribery.

Dantzler’s security company, purportedly providing security services for the “reentry program” hotels, was operational only since November 2020 without a proper security license, subcontracting with other companies. Between January 2021 and May 2022, the company received around $21 million in public funds, paying subcontractors approximately $12 million while retaining $9 million.

Hu controlled two participating hotels and a catering company in the program. From October 2021 to November 2023, her hotels received about $12 million in public funds. Her catering company, formerly operating as a construction firm, repositioned itself as a food service business in September 2020 to access more funds, garnering around $17 million from the program between September 2020 and July 2023.

Medina’s organization offered various reentry services for formerly incarcerated individuals. After being selected by MOCJ to operate the emergency housing program, Medina was accused in the indictment of soliciting and accepting bribes from Dantzler and Hu. The corrupt dealings included:

1. Acquiring a $1.3 million townhouse in Washington Heights for Medina by Dantzler and Hu.
2. Purchasing a luxury car worth $107,000 for Medina by Hu, including paying off the car loan.
3. Spending $750,000 on purchasing and renovating a house in New York’s Clifton Park for Medina by Dantzler.
4. Handing over a stack of cash to Medina by Hu in the Queens hotel in September 2020, in exchange for catering checks exceeding $187,000 under the emergency housing program. The transaction was captured by the hotel’s surveillance camera.
5. Payment of around $75,000 by Dantzler through his security company to assist Medina and his family in repaying several debts, including mortgage and auto loans.

Overall, Dantzler and Hu allegedly provided at least $2.5 million in bribes to Medina, with Medina distributing $51 million in public funds to their enterprises.

During this process, Dantzler’s security company received about $21 million, with $9 million flowing into his personal account; Hu’s hotels received around $12 million, while her catering company obtained about $17 million.

Additionally, according to reports from media sources like the “New York Immigration Gazette” last year, Hu grew up in Hubei, China, initially working as a food stall vendor before becoming a wealthy hotel developer.

The report also mentioned that Hu actively donated to Mayor Adams’ campaign and had a close relationship with Winnie Greco, a former assistant to Adams. Greco moved into the Wyndham Garden hotel near Fresh Meadows in Queens due to an injury and stayed for over eight months. The hotel, supported by New York City government funds, was repurposed as a shelter for over 100 released inmates.

John J. Durham, the U.S. Attorney for the Eastern District of New York, stated, “The defendants’ illicit acquisition of public funds intended for emergency housing during the pandemic is reprehensible. They exploited this crisis for personal gain, and we will relentlessly hold them accountable.”

Jocelyn E. Strauber, director of the New York City Department of Investigation (DOI), credited the Mayor’s Office of Risk Management and Compliance for referring the case to DOI, leading to the investigation. She also expressed gratitude for the cooperation of the U.S. Attorney’s Office for the Eastern District of New York and the Federal Bureau of Investigation.

Hu was granted bail after her arraignment yesterday afternoon. Her defense attorney, Benjamin Brafman, specializing in white-collar crime cases and representing prominent defendants such as Hollywood producer Weinstein in the sexual misconduct scandal, as well as mob members and politicians, remarked to Dajiyuan, “I believe that Ms. Hu is a victim in many aspects of this case, not a co-conspirator.”

Brafman has represented various Chinese celebrities, including Wu Lisheng, a CPPCC National Committee member accused of bribing a UN official, who now serves as the chief counsel for the former Shandong Compatriots Association chairman An Quanzhong. ◇