Former Hempstead Village Housing Authority executive director and three contractors arrested in kickback scheme, prosecutors say

Federal agents Tuesday arrested the former executive director of the Hempstead Village Housing Authority, along with three contractors, in a $400,000 kickback scheme involving repairs at the authority's developments, according to court documents.

The former director, Stacey Stackhouse, 51, of Dobbs Ferry, had earned $130,000 a year at the troubled housing authority before she was fired in April 2013, after the start of a federal criminal investigation into the authority's finances. Stackhouse also received free housing in an authority unit, E-ZPasses and gasoline cards.

Her actions were "for no legitimate purposes other than to steal money," Assistant U.S. Attorney Michael Canty said in court. "She had extensive experience . . . [in overseeing] housing projects."

The alleged pay-for-play scheme involved contracts for work on a roof, boilers and security systems, federal officials said.

The kickback scheme involved three contracts for which Stackhouse knowingly accepted vastly inflated and improper bids to make repairs on housing authority property, according to the complaint filed by Jennifer Lake, a criminal investigator with the inspector general's office of the U.S. Department of Housing and Urban Development. FBI agents also worked on the investigation.

The complaint said $432,000 in kickbacks went to the co-conspirators. The complaint does not detail kickbacks Stackhouse personally received except in one case where she allegedly received $4,500 for making a $9,000 payment in housing authority funds "under the guise of 'consulting fees.' "

3 projects investigated

The three contractors were identified by federal authorities as James Alimonos, 51, of Bethpage; Demetrios Kaouris, 47, of Plainview; and Michael Lambros, 48, of Jamaica, Queens.

Stackhouse, Kaouris and Lambros were each released on $150,000 bond.

Alimonos, who was described by Canty as "the mastermind" of the kickback scheme, was held because he could not come up with satisfactory collateral to support a bail package.

Though a federal complaint says that Alimonos had made several hundred thousand dollars in the scheme, Canty said officials have not yet been able to trace what he did with all of his share of the money.

Canty said Alimonos had indicated that he had not been working and was collecting unemployment insurance.

All four defendants were not required to plead to the complaint charging them with conspiracy to commit wire fraud at the hearing before U.S. Magistrate A. Kathleen Tomlinson at the federal court in Central Islip.

Stackhouse's attorney, federal public defender Tracey Gaffey, declined to comment, as did attorneys for the three contractors; Brad Henry of Manhattan for Alimonos; Vito Palmieri of Mineola for Kaouris; and Joseph Ferrante of Hauppauge for Lambros.

Federal officials said the investigation into the operations of the housing authority was continuing.

The three projects that allegedly involved kickbacks, according to officials, were:

The September 2011 repair of the roof at the 32-family unit Clinton Court development on Yale Street;

The July 2012 repair of piping and a boiler at the 30-family unit Gladys Gardens development on Gladys Avenue;

The August 2011 repair of the intercom system at the 75-senior citizen development Totten Towers on Totten Street.

'Into their own pockets'

"The defendants here were entrusted to use federal funds to provide safe and affordable housing to senior citizens and low-income residents," Loretta Lynch, U.S. attorney for the Eastern District of New York, said in a statement. "Instead, as alleged, they bypassed the rules in order to siphon taxpayer dollars into their own pockets."

Before Stackhouse was fired, one Housing Authority news release said she had more than 17 years of experience in administering public housing for numerous authorities, including positions ranging from middle management to executive director to consultant.

The release said that before her housing career began, Stackhouse had worked as a paralegal on Wall Street and as a legal assistant extradition specialist with the Kings County district attorney's office. She has a bachelor's in sociology and criminal justice from SUNY Old Westbury and a paralegal certificate from Adelphi, the release said.

Rosemary Olsen, who replaced Stackhouse as director of the housing authority, said she was aware of the ongoing investigation into the authority, but was not aware of any arrests. "We are working to turn the authority around," Olsen said.

In a written statement, the housing authority said it "has complied with all requests from federal authorities. . . . Above all else, our priority has been -- and will continue to be -- ensuring the quality of life for all of our residents."

Several residents at the Clinton Court development said Tuesday that they were surprised by the federal arrests.

Melanie Butler, 52, said she had lived there since 1998 and knew Stackhouse since high school.

"I'm shocked. I never thought she would be that kind of person to do this," Butler said.

If convicted, the defendants face a maximum of 20 years in prison. With John Asbury

By Robert E. Kessler

Robert.Kessler@newsday.com

Bob Kessler covers federal law, including law enforcement agencies such as the FBI, DEA, IRS and ATF, as well as the federal courts.