Feds say city worker lied to help clout contractor get paid before work was done

This is a developing story, check back for updates. From a July 17, 2019 Sun-Times report:

A City Hall inspector has been charged with wire fraud and lying to the FBI in a case involving a city contractor who has surfaced in the investigation of Ald. Carrie Austin.

Joseph E. Garcia, 37, is accused of submitting bogus documents, falsely claiming to have inspected home-repair projects done for low-income Chicago homeowners, giving City Hall the go-ahead to pay the contractor, Oakk Construction of Summit.

Garcia also is charged with lying when the FBI questioned him on April 23, 2014, about what authorities described as a scam that also involved a city contractor, its president and its project manager, none of them identified by name.

But the Chicago Sun-Times has confirmed that the case involves Oakk, company president Alex Nitchoff and construction superintendent John Bodendorfer, who haven’t been charged.

Bodendorfer, 51, and Garcia are neighbors on the Southwest Side. Garcia lives in a home Bodendorfer owns. Bodendorfer oversees the construction jobs that Garcia was supposed to inspect in 2014 before Nitchoff’s company was paid by City Hall.

A federal grand jury indicted Garcia on March 21 — just before the five-year statute of limitations expired. The indictment remained under seal while the federal investigation continued.

Garcia appeared Tuesday before U.S. Magistrate Judge Young Kim, pleaded not guilty and was released pending trial.

Oakk is a longtime city contractor. It has made millions of dollars under City Hall’s Emergency Housing Assistance Program, repairing porches and roofs for low-income homeowners. Under the program, Oakk is supposed to be paid only after the work has been inspected.

According to the indictment, though, Garcia signed off on porch repairs for the company even though he hadn’t done the inspections.

In some cases, Garcia helped Oakk get paid before the porch projects were completed, authorities say.

Garcia, a city employee since 2006, has been placed on “administrative leave” from his job with the Chicago Department of Housing, where he is a rehabilitation construction specialist making $92,136 a year, according to a spokesman for the agency.

On Sunday, the Sun-Times reported that Nitchoff and Oakk Construction were named in a grand jury subpoena seeking a wide range of information, including details about Nitchoff and his family’s businesses and about Austin’s purchase of a new, $236,000 home in the 12200 block of South Laflin Street. She bought the home with a $231,000 loan guaranteed by the federal government.

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Also named in that subpoena were Nitchoff’s father Boris Nitchoff, his brother Constantino Nitchoff and his daughter Lauren Nitchoff and four additional Nitchoff businesses — Mako Properties, Koal Enterprises, 995 LLC and Drop Box Inc. — as well as Maxwell Services Inc., owned by former Oakk employee Antonia Tienda.

That subpoena, which also sought information involving Bodendorfer, surfaced after federal agents raided Austin’s ward office on June 19.

The Garcia indictment was issued by the same grand jury that issued the Austin subpoena, records show.

Garcia and Bodendorfer hung up on a Sun-Times reporter Wednesday. Garcia’s attorney Stephen Hall wouldn’t comment.

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The indictment says that Garcia lied to the FBI when he denied having a personal relationship with Nitchoff and Bodendorfer.

As the Sun-Times previously reported, companies owned by the Nitchoffs and Tienda have been paid more than $100 million for city projects that have included soundproofing homes near O’Hare Airport and Midway Airport and rehabbing or replacing porches and roofs for low-income homeowners.

Oakk has accounted for $63.6 million of those payments, from 20 city contracts, five of them for soundproofing work, records show. The bulk of the remaining work was for installing roofs and porches.