N.Y. Today: Shelter executives who paid themselves millions

November 24, 2021

By James Barron

It's Wednesday. We'll look at financial entanglements involving two operators of homeless shelters. We'll also meet Devashish Basnet, who immigrated from Nepal when he was 6, speaking not a word of English. He just became a Rhodes scholar.

Michael Appleton for The New York Times

One development involving shelter operators had to do with CORE Services Group. A New York Times investigation published last month found that CORE, a nonprofit, had channeled contracts worth at least $32 million into for-profit companies tied to its chief executive, Jack Brown III, allowing him to earn more than $1 million a year. Brown (pictured) also hired at least five family members, including his brother, who took home a six-figure salary.

On Monday, in response to questions from The Times, the city said it was severing ties with CORE.

[N.Y.C. Severs Ties With Housing Boss Who Earned $1 Million a Year]

My colleague Amy Julia Harris writes that the city ordered Brown to close the for-profit companies and fold their services into the charity following questions from The Times in September. City officials said they had instructed Brown to step aside and had ordered CORE to repay the city more than $2.3 million for "excessive executive salaries."

The nonprofit refused, according to a letter the city sent to CORE last week.

Isaac McGinn, a spokesman for the Department of Social Services, the agency that oversees the operation of homeless shelters, said the city planned to phase out CORE as a shelter provider by March. The city has already closed one CORE site.

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Shopping sprees and car payments

The other shelter operator, Ethel Denise Perry, admitted using money from the city to cover shopping sprees at Bergdorf Goodman, Ferragamo, Neiman Marcus and Manolo Blahnik and other personal expenses, including car payments and a gym membership. Letitia James, New York's attorney general, called the thefts "immoral."

The city had paid the nonprofit she ran, Millennium Care, $10 million to run a 100-room homeless shelter in the Bronx. Perry admitted taking nearly $2.4 million beyond her official salary. She also put her brother and nephew on the Millennium Care payroll.

[She Ran a Bronx Homeless Shelter. Here's What She Spent Millions On.]

My colleague Andy Newman writes that Perry used the nonprofit as a personal piggy bank in part because it had no board of directors. It also failed to file required financial reports with the state and the Internal Revenue Service, and, according to a plea agreement she signed, "carried out its business in a persistently illegal manner."

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In the plea bargain, reached in State Supreme Court in Manhattan, Perry pleaded guilty to tax fraud and Millennium Care pleaded guilty to grand larceny. Perry was sentenced to five years' probation and ordered to pay $1.1 million in taxes and penalties. Millennium Care will pay a fine of $2,394,169 — the exact amount that Perry overpaid herself — and will be dissolved. Millennium Care's 100-room shelter is now run by one of the city's biggest shelter providers, Acacia Network.

Perry's lawyer, Frank Perrone Jr., said that she had already paid more than $200,000 that she owed in back taxes. He noted that notwithstanding James's comments, only Millennium Care, not Ms. Perry, had pleaded guilty to larceny. Perrone is also Millennium Care's lawyer.

WEATHER

It's a sunny day in the mid-40s, but bundle up. The wind chill will make it feel colder. Then expect a partly cloudy evening with temps in the high 30s.

ALTERNATE-SIDE PARKING

In effect until tomorrow (Thanksgiving Day).

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A Rhodes scholar who sang at his interview

Sean Sirota for The New York Times

Devashish Basnet did not think he aced the interview.

"They intentionally try to throw you off and ask really jarring questions," said Basnet, a 21-year-old senior at Hunter College who was talking about being interviewed by the committee that chooses Rhodes scholars.

He was also well aware that he came from Hunter, part of the City University of New York system. Rhodes scholarships, which finance two or three years of graduate study at the University of Oxford, often go to students from Ivy League schools. "I was the only public university student" among the New York-area students who were interviewed, he said. "I felt like the odd person out."

And there was the legacy of Cecil Rhodes, the diamond mogul who endowed the scholarships at the beginning of the 20th century. Rhodes's white supremacist views have been attacked as harbingers of apartheid.

Basnet was born in Kathmandu, Nepal. He came to the United States with his parents when he was 6. They arrived seeking political asylum in 2006. He was later accepted into the Obama administration's Deferred Action for Childhood Arrivals program. At Hunter, where he is a political science major as well as the president of the Undergraduate Student Government, he won a fellowship that sent him to the border with Mexico, where he assisted families that had crossed into Arizona.

Jennifer J. Raab, the president of Hunter, said the school had used a $1.5 million gift to "do what the best of the privates do, identify the students and nurture their talent, helping to make them competitive candidates for Rhodes and other scholarships." She called Basnet "an all-around extraordinary person" with a long list of accomplishments during his college career.

The Rhodes interviews were conducted by videoconference over two days last week. On the second day, Basnet said, the applicants were told to log on, talk to each other and wait while the committee deliberated. It would call back anyone it wanted for another interview.

"I was in the middle of talking about my Zodiac sign with the other finalists," said Basnet, a Virgo. "I blinked and there I was, facing the scholarship committee. They don't give you a warning before they re-interview you."

After some questions, there was the inevitable request: Sing something, please.

It was inevitable because Basnet is a baritone. He is appearing in Hunter's production of "The Marriage of Figaro." But he decided not to sing Mozart. He chose an arrangement of a Mexican folk song, "Mi Sueño" ("My Dream").