Malliotakis, Local Officials and Residents Call for Federal Investigation into NYC Shelters

(STATEN ISLAND, NY) — Today, Congresswoman Nicole Malliotakis (NY-11) called on the U.S. Department of Justice to investigate no-bid contracts tied to many New York City homeless shelters, citing a blatant lack of accountability and oversight and pointing to research showing out-of-control costs to taxpayers. She added that, based on her extensive research—including review of lucrative contracts, shady past dealings of some operators, and the recent indictments and the discovery of excessive per-unit costs—the City’s homeless shelter contracts raise serious concerns about corruption.

In New York City alone, the Department of Homeless Services spends $8 billion annually on shelters, many of which are awarded through no-bid contracts. When broken down per unit, Malliotakis’ research found that costs in her district reach $9,103 per month at 109 Port Richmond Avenue and average $9,300 per month at Island Shores—both far exceeding the community’s average monthly rent of $1,698 or $3,800 mortgage payment.

On March 31, 2026, a criminal indictment was unsealed by the United States Department of Justice charging four individuals tied to a nonprofit operating homeless shelters in New York City. The indictment alleges the leaders of the organization stole approximately $1.3 million from the taxpayer-backed nonprofit and steered millions of dollars in contracts to favored vendors in exchange for bribes and kickbacks.

An Associated Press News report from October 18, 2024, details findings from a yearlong investigation by the New York City Department of Investigation, uncovering widespread mismanagement, self-dealing, and nepotism in New York City’s homeless shelter system which has raised serious concerns about how these contracts are being awarded.

Malliotakis is now calling on the U.S. Department of Justice to investigate these lucrative shelter contracts for potential fraud and abuse of taxpayer dollars. The growing number of homeless shelters in her district—enabled in part by New York City’s Right to Shelter laws and a contracting system that routinely bypasses competitive bidding—warrants rigorous federal scrutiny. Additionally, Congresswoman Malliotakis highlighting how the city is ignoring zoning and environmental laws by attempting to place shelters in Special Flood Hazard or Freshwater Wetlands Areas and has placed shelters in buildings with J-2 occupancy classification which allows for only permanent residences.

“New York City’s shelter system has become a business, with lucrative contracts costing taxpayers much more per unit than they would pay for monthly rent or mortgage payments,” said Congresswoman Nicole Malliotakis. “Since Bill de Blasio, the shelter population has doubled—and now Mayor Mamdani is proposing even more shelters in our district and across the city with shady contracts to questionable operators. From Port Richmond to Midland Beach, and Bensonhurst to Tottenville, the city is warehousing the homeless without helping them transition out and fleecing taxpayers in the process. This is not compassion—it’s failed leadership and possibly corruption, which is why we are calling on the U.S. Department of Justice to investigate these shady contracts.”



“When the City makes decisions that impact New Yorkers’ lives and quality of life and there are allegations of misconduct, there must be a prompt and independent investigation done and all those involved must be held accountable. There is no room for corruption in government, especially when it could have real and dire consequences for our hardworking constituents who live and work here,” said Senator Jessica-Scarcella Spanton.

"What I see is a tree growing out of the concrete jungle of NYC, the fruit is money, and everyone is picking the fruit as the tree grows. We have predatory and deceptive, no doubt corrupted developers of questionable characters, and of course, elected officials with their hands in the cookie jar. And no one at the state level is willing to investigate these people. The ledgers that I’ve seen, total into the billions spent in regards to these shelters. It’s about money, not about the homeless. I commend, and join Congresswoman Nicole Malliotakis in calling for federal inquiry, intervention, and investigation by the Dept. of Justice. Hopefully there will finally be some accountability, and oversight with these shelters," said Senator Steve Chan.

“We should be working to reduce homelessness, and not be in the business of keeping people homeless. An investigation by the DOJ is beyond warranted. I want to thank Congresswoman Nicole Malliotakis for leading this fight and the Port Richmond – North Shore Alliance for their work in bringing this situation to light," said Assemblyman Sam Pirozzolo.

“These shelter contracts raise serious red flags, and taxpayers deserve clear answers,” said Assemblyman Michael Tannousis. “We’re seeing skyrocketing costs, a lack of transparency, and little accountability for how these agreements are being awarded and managed. We cannot allow a system like this to continue unchecked. It’s time for a thorough federal investigation to restore trust and ensure every taxpayer dollar is being spent responsibly.”

“The city has awarded billions of taxpayer dollars in emergency contracts for homeless shelters over the past decade, often with little transparency and oversight. The fact that one of these contracts recently resulted in a federal indictment for an alleged bribery and kickback scheme should raise public alarm, and prompts questions about other potential criminality we don't know about. Congresswoman Malliotakis is right to call for the DOJ to further investigate whether there has been fraud, waste and corruption in this murky homeless shelter contracting process," said City Council Minority Leader David Carr.