THE END OF AGUILA

STATEMENT REGARDING

END OF AGUILA

August 15, 2022

My time with Aguila, Inc. (“Aguila”) ended this month. I was introduced to it in August of 2020, and joined the organization to investigate the fraudulently attempted consolidation of Aguila into Neighborhood Association-Inter-Cultural Affairs (“NAICA”). I reported my findings to the New York State Attorney General (“NYSAG”) in a letter dated 9/10/2020. Currently, Aguila is in the hands of a bankruptcy court-appointed plan administrator to liquidate the little that is left. However, I am leaving Aguila better than I found in voluntarily filing for bankruptcy and proceeding to dissolution.

Days after I accepted the CEO position, the New York City Department of Homeless Services (“DHS”) informed Aguila it was canceling or transferring ten of its eleven sites to other providers. DHS’s decision to eliminate all but one of Aguila’s contracts was in response to the events of September 30, 2020, in which the NYSAG raided multiple locations simultaneously, including, but not limited to, Aguila’s offices, offices of Aguila’s consultant and Bronx County Clerk Luis Diaz, and the homes of the then CEO, and the longtime Director of Finance. (Luis Diaz would later plead guilty to felony charges for specific actions referencing Aguila and stripped of his position as Bronx County Clerk.) Consequently, Aguila was in desperate need of new and credible leadership.

In October 2020, the New York Post wrote that Aguila “installed Ray Sanchez as the new chief executive to help clean up the mess at the non-profit social-services group . . . Sanchez, an attorney, previously served as legal counsel to Bronx Borough President Ruben Diaz Jr. Ray is well regarded. Aguila has a problem, and Ray was hired to try to fix it.”

?As CEO, I stabilized the organization and oversaw a team that did tremendous remediation of Aguila’s finances. Moreover, we worked with the NYSAG to retrieve thousands of files they had seized, but Aguila desperately needed to process reimbursements.

I fired underperforming staff and replaced significant departures resulting in an upgrade of human capital across multiple departments. In addition, I recruited three attorneys to the depleted Board of Directors and purged unnecessary waste. Aguila also received a federal SBA PPP loan for $1.9 million, which was later forgiven. Most importantly, after months of nonpayment and dire financial liquidity, Aguila received millions in reimbursements from DHS.

By early 2021, Aguila’s lone contract was at the Parkview Hotel. This site was transformed from a traditional homeless shelter into a pilot program in response to the COVID-19 pandemic in early 2020. It was the largest COVID preassessment center operated by New York City. The site administered over 70,000 clients during the epidemic. Unfortunately, this programmatic change created several challenges. For example, at the beginning of that fiscal year, DHS approved a monthly rent budget line on the Parkview Hotel for $5,026,146 when the actual rent was $5,629,000. Aguila’s leadership worked with DHS to amend the contract value from $8,453,638 to $11,245,731, which includes the total rent change. Furthermore, the staff at the Parkview Hotel should be commended for keeping it running at a high level despite all the turmoil. The site was transferred to another provider in July 2022.

We had similar success with Aguila’s Fulton site. We discovered a contract amendment that languished at the City’s Law Department for over a year. Finally, we were able to complete the registration of the amendment on the Fulton contract, increasing the available funding on it by a total of $9,364,694.

Aguila will be submitting additional invoices to DHS to yield another $1.2 million in reimbursements. Additionally, substantial fiscal measures were taken to drive efficiency, including lowering our insurance premiums by $200,000 annually and negotiating a settlement with the NYS Department of Labor that removed thousands of dollars in fines and interest against Aguila.

Our hard work and persistence resulted in $2.6 million in cash on hand, leading to liquidation and the $1.2 million referenced above. That is at least $3.8 million to properly wind down the organization. It is irrefutable that we have acted as responsible managers over the last two years. Moreover, by voluntarily taking the organization to bankruptcy and avoiding fruitless litigation, we placed the creditors in a substantially better position than they would be otherwise.

I am grateful to Aguila’s staff and everyone that supported our work. However, better and smarter supervision of the homeless services industry is needed to protect New York City’s vulnerable homeless populations and prevent wrongdoing. Furthermore, this sector will continue to be problematic until more of the service providers own the buildings that they operate. Year after year, we see repeat offenders on the Public Advocate’s Landlords Watch List, representing thousands of housing units. I encourage our lawmakers to legislate real consequences for the landlords on this list and for the more egregious operators, bringing eminent domain actions to transfer ownership to nonprofits providing these essential services.