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As a result of an investigation pertaining to bribery in the real estate industry, the Investigation Department of the Manhattan district attorney’s office uncovered a scheme to bypass safety and security protocols and install illegal gas meters in Brooklyn.

In an indictment unsealed on January 12, 2017, the seven defendants including a former employee of National Grid and six current employees were accused of enterprise corruption. In addition, 30 landlords, property managers and contractors were charged with commercial bribery and falsifying business records. Prosecutors have described the scheme as a “shadow utility company,” installing illegal gas meters for landlords who did not want to pay for licensed workers, follow safety rules or wait for New York City inspections.

During a press conference held on January 12, Eric Gonzalez, the acting Brooklyn district attorney stated that “[t]his is an unprecedented case in our opinion, showing that the hot real estate market in Brooklyn serves to feed criminal activity … this corruption within a major company is particularly alarming, given potential lethal consequences.”

Weldon “Al” Findlay, who worked for National Grid until 2010, used current employees led by Phoebe Bogan, 41, to create accounts for landlords and install the meters without proper inspections by Department of Buildings’ workers or master plumbers, investigators said.

As authorities have described, for several months last year, Mr. Findlay received phone calls or texts from landlords in gentrifying neighborhoods like Bushwick, Williamsburg and Bedford-Stuyvesant who wanted to skirt city regulations, and he charged them $1,300 to $2,500 for every illicit meter installed. Ms. Bogan, his primary accomplice, was a customer service representative at National Grid’s main office at One MetroTech Center in Brooklyn. Ms. Bogan served as a go-between between Mr. Findlay and the technicians who performed the illicit meter installations.

Inspectors with National Grid and the city’s Buildings Department have already checked the 33 locations involved in the investigation and confirmed that there are no risks to health and safety, a serious concern following the large gas explosion on Second Avenue in the East Village in Manhattan in 2015.

In a statement, National Grid said it had cooperated fully with the investigation and was also conducting its own inquiry. “National Grid has zero tolerance for unethical and illegal behavior,” the statement said. “The alleged misconduct, although limited, contradicts the dedication and professional values of our 15,000 hardworking men and women.”

Each of the 37 defendants in the case pleaded not guilty at arraignments in State Supreme Court in Brooklyn on Thursday.

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