Volume 16 • Issue 35 | January 30 - February 05, 2004

Prison sentence in residential grant case

A 30-year-old British citizen was sentenced last week to six months in prison for defrauding the residential grant program of the Lower Manhattan Development Corporation. Allen Klein was approved for the $12,000, two-year commitment grant, intended to boost the Downtown population after the Sept. 11, 2001 terror attack, but then relocated to Florida, L.M.D.C. officials said in a statement.

Officials became suspicious when Klein’s checks were returned to the corporation and it was discovered that Klein was having his mail forwarded from 71 Broadway to Florida. Although Klein claimed he was caring for his sick aunt and mother, the L.M.D.C. began an investigation and within a month referred the matter to the U.S. Attorney’s Office for the Southern District of New York.

Klein was nabbed after he picked up a $5,000 grant check at the post office. He pleaded guilty in September, 2003 to theft of government property and mail fraud. Along with his prison sentence, Klein may pay for his crime by expulsion from the country: United States District Judge Richard Conway Casey directed the Department of Homeland Security’s Bureau of Immigration and Customs Enforcement to begin the deportation process, according to the L.M.D.C.

The $281 million residential grant program was launched in August, 2002 to attract new residents Downtown after 9/11 and to entice current residents to stay. The application period ended last spring.

—Elizabeth O’Brien


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