Lawsuit: major shelter provider defrauded New York City

Childrens Community Services became one of New York City’s largest providers of homeless shelters in just four years, pulling in nearly $700 million in city contracts since 2017. Despite its immense city funding, many fellow homeless service providers barely knew its leader, and the nonprofit’s online presence is minimal. Its headquarters was listed at a mostly empty call center in a commercial walk-up, according to one visit from NYN Media in 2018. 

That seclusion may be less surprising now that a new lawsuit has accused Childrens Community Services of defrauding the city through at least six subcontractors that failed to deliver on promised services and supplies, The New York Times reports. This comes soon after federal prosecutors and city Department of Investigation officials executed warrants for the locations of the nonprofit and its subcontractors. The organization has faced heightened scrutiny since 2018, when employees from the city Department of Homeless Services initially noticed irregularities in its billing. 

New York City has also initiated an unprecedented effort to ask a judge to allow it to take control of the organization’s 28 shelters, whose operations would then be turned over to other nonprofits. 

In response to the case, providers and advocates told City Limits that a reluctance from more established organizations to manage hotels often leaves room for nonprofits less connected to city services to fill in that gap in service.