Man who earns $1m a year to operate homeless shelter in New York City accused of fraud

A Black man earning $1 million to operate a homeless shelter in New York City has been accused of fraud and giving high-paying jobs and bonuses to his relatives and companies connected to him.

Jack A. Brown III, 53, who is a former executive of a private prison, was found to have failed to deliver key services by an audit. The Times also cited an audit by the New York State comptroller which claimed that Brown had shown “a disturbing pattern of ethical violations.”

Brown founded CORE Services Group, a nonprofit organization, to provide shelter to homeless people in New York but the audit also accused him of turning the nonprofit into a lucrative gig.

Since 2017, the Times reports that Brown has received more than $352 million from Mayor Bill de Blasio’s administration to operate homeless shelters. However, Brown has reportedly channeled contracts worth at least $32 million into for-profit companies tied to him, allowing him to earn more than $1 million a year.

The Times claims that he hired his family members and gave them perks such as gym memberships and cars. According to the Times, his mother, sister, brother, aunt and niece have all worked at the CORE Services Group. Also, a security company with ties to Brown was hired to provide security but slept on the job and did little to stop frequent drug use and fistfights. His catering company is also in charge of providing food to the shelter.

A 58-year-old who lived in CORE’s largest shelter in New York City called the Beach House shelter a “hell.” “A lot of money is going into this place,” a former resident of the shelter said. “But it’s not going to us.”

Brown was contracted to provide shelter homes following a growing homelessness crisis in New York. Despite the heavy investment in homeless shelters, homeless people still crowd shelters. According to the Times, about 77,000 homeless people live in New York City, and the number is expect to grow next year.

Meanwhile, CORE has defended its track record and that of Brown. CORE said it has tried to comply with the changing rules. It also explained that the subsidiaries were established because payments from the city often lagged, and other vendors had repeatedly bungled the work.

“Jack Brown and CORE have served New Yorkers in need for more than a decade, despite the many financial and operational challenges involved in working with New York City’s notoriously overburdened homeless services system,” a statement read.

Brown previously worked as an executive at Correctional Services Corporation, a private prison in Florida that was fined for bribing politicians in 2003.