Internal City Hall Probe Finds Inmate Hotel Operator Had a Secret Security Firm. Millions of Dollars Are Missing.

A “comprehensive review” ordered by Mayor Eric Adams of security at hotels housing released inmates during the pandemic found that the nonprofit in charge had secretly steered millions of taxpayer dollars to a subcontractor with close ties to the group.

The mayor’s probe came in response to a March 2022 investigation by THE CITY into the hotels run by Exodus Transitional Community, an organization that helps incarcerated people reintegrate into the outside world.

Bank records show that from February 2021 until the mayor initiated the review 13 months later, Exodus paid more than $12 million to a bank account for Watchforce Security Services Inc. But Watchforce did not have a security license, and it turned to other security companies that did, paying them $8.3 million to provide the security at the hotels. That left nearly $4 million in federal COVID emergency housing funds unaccounted for.

The Adams inquiry, which questioned Exodus about a possible kickback scheme with Watchforce, ultimately concluded that Exodus had violated the city’s procurement rules by hiring and paying Watchforce without disclosing its existence to city agencies.

Yet after discovering the hidden subcontractor, the Mayor’s Office of Criminal Justice (MOCJ) did not inform City Comptroller Brad Lander of its existence, even as the comptroller was weighing approval of a contract renewal that would ultimately increase the city’s outlay to Exodus for the hotel program from an initial award of $835,000 to $83 million.

In 2021 alone, $42 million in federal funds went to the Exodus hotel program according to a later audit, which found “significant deficiencies” in internal financial controls.

THE CITY’s 2022 investigation revealed that Exodus relied on an unlicensed security firm at some of the hotels, including one where a resident alleged she was sexually assaulted by an Exodus caseworker, as asserted in court records . Following THE CITY’s article, Adams ordered a city probe by his newly created Mayor’s Office of Risk Management and Compliance , headed by veteran government investigator Marjorie Landa. He also asked the city Department of Investigation to get involved.

Adams’ Risk Management probe — whose results have not been released publicly — culminated in a settlement last August in which Exodus agreed to cut ties with Watchforce. The agreement, obtained by THE CITY via the Freedom of Information Law, emphasized: “The City and MOCJ continue to view Exodus as an important partner and intend to contract with Exodus going forward.”

Among the hotels where Exodus paid Watchforce to provide security was the Wyndham Garden Fresh Meadows, which became an unlikely clubhouse of sorts for Adams and some of his close associates, as detailed previously by THE CITY — including his Asian affairs liaison Winnie Greco, who lived at the hotel for months in a room paid for with government funds.

Adams held campaign fundraisers at the Wyndham in 2021 while Exodus was placing released inmates there and paying Watchforce for security, under a contract that began under former Mayor Bill de Blasio. Among those attending was John Sampson, the disgraced former state senator and longtime Adams pal recently released from federal prison, who was at the time working for Exodus’ hotel program under the title “senior site coordinator.” He was later hired by the Wyndham’s owner, Weihong Hu.

During the time Watchforce was paid to manage security at the Exodus hotels, security emerged as an issue, an audit submitted to the Internal Revenue Service and New York State attorney general shows.

According to that review of Exodus’ finances, Exodus paid a female participant in the released inmate program $125,000 in 2022 to settle her claim that she’d been sexually assaulted by an Exodus caseworker at the Fresh Meadows hotel.

The audit also states that Exodus paid $55,000 to a former employee who sued after he was terminated, he says, for objecting to the hiring of a staffer “he believed was a substantial and specific danger to public health and safety.”

Introducing a Middleman

After Adams ordered up the Risk Management inquiry into Exodus, Landa quickly zeroed in on Watchforce and its founder, Chris Dantzler, a paid consultant to the nonprofit.

Landa demanded that Exodus provide documentation of all payments to Watchforce and questioned Exodus about whether Exodus’ staff or relatives had, in return, received secret payments from Watchforce or Dantzler, court records obtained by THE CITY show.

The bank records, made public in a lawsuit against Exodus and Watchforce over its security payments, show that while Exodus paid the unlicensed Watchforce more than $12 million to manage security at hotels from February 2021 through March 2022, Watchforce paid just $8.3 million to the licensed firms that actually handled the security during that time.

What happened with the remaining $3.7 million is unclear. But a formal corrective action plan the mayor’s office reached with Exodus in August gives some clues: City Hall specifically required Exodus to improve how it handles its expenses going forward, including cash management, petty cash and travel and meals expense reimbursements.

The August 2023 settlement and corrective action plan between MOCJ and Exodus that resulted from Landa’s investigation surfaced concerns that Exodus made payments to Watchforce that were not demonstrably related to the contract’s purpose of housing released inmates.

In that agreement, Exodus promised going forward to use funds it receives from the city to pay subcontractors only “in connection with the applicable contract, and not use those funds for any other purpose.”

Internal emails show that MOCJ first learned of Exodus’ hiring of Watchforce March 13, 2022 — about 15 minutes before THE CITY published its article that first revealed Exodus’ use of the unlicensed security firm Global Operations Security.

Exodus’ chief legal officer, Danielle Rosario, informed MOCJ staff that Global had suddenly halted work for Exodus after it was unable to provide evidence it had a security license. The email let MOCJ know that Watchforce was “assembling a team to take over at 8 am tomorrow.”

Joseph Berkman-Breen, MOCJ’s senior counsel, responded, “Watchforce is a new provider of security at the hotels, correct?” He informed Exodus they therefore needed to forward information about Watchforce so MOCJ could complete a required background check of Watchforce.

Rosario responded that, actually, Watchforce did not provide security “directly” but acted as a manager of security companies, including Presidential and RS&T, firms she said had actual New York state watch guard licenses. She disclosed for the first time that Exodus paid Watchforce, which in turn paid Presidential and RS&T. She identified Dantzler as the “owner” of Watchforce.

‘Office Renovation’

Because MOCJ did not know of Watchforce’s role as a subcontractor, City Hall never performed the required background check on Watchforce. If it had, they would have learned that Exodus hired Watchforce to manage security at the hotels even though Watchforce does not have a New York State security guard license.

Bank records show the $12 million in payments from Exodus going to a bank account registered to Watchforce Security Inc., giving an address on Main Street in West Orange, N.J.

About two weeks after Exodus revealed the existence of Watchforce Security Services Inc. to MOCJ, Dantzler incorporated a similarly named company called Watchforce Security Services LLC at his Long Island address.

From the start of its inquiry, Risk Management’s Landa was concerned about possible kickbacks.

In a June 6, 2022, letter to Exodus’ CEO Julio Medina, Landa demanded a trove of records documenting all of Exodus’ security-related payments to Watchforce, as well as all Watchforce’s payments to security firms.

According to the letter, Landa was trying to determine whether there was an illegal behind-the-scenes arrangement between Exodus and Watchforce.

“Has Exodus or any employee of Exodus or immediate family member (i.e., spouse/domestic partner, child, sibling or parent of the employee) received anything of value from Watchforce or Mr. Dantzler directly or indirectly?” she inquired.

Landa also asked Exodus if it had “entered into any business or other transaction with any company in which Chris Dantzler had an ownership interest or by which he is employed.” She specifically asked if Dantzler had “ever been employed by Exodus or any related organization.”

Dantzler has multiple ties to Exodus, publicly available records show. Throughout 2021 and 2022, while Exodus was paying Watchforce, Exodus listed Dantzler as the group’s point of contact for its affiliated music production company, Exodus Productions. He was to be contacted via an Exodus email. Also in 2021, Dantzler applied for a trademark designation for Exodus Productions’ logo.

On its 2020 tax forms, Exodus also lists Dantzler as an “independent contractor” paid $600,000 to perform “office renovation services.” And in March 2022, Dantzler filed amended incorporation papers in New Jersey listing himself as a “member” of Exodus Productions LLC and as “president” of Watchforce Inc.

‘Long Term Relationship and Trust’

Exodus’ close relationship with Watchforce is further revealed in a lawsuit filed by one of the licensed firms that handled security at the hotels, Presidential Security Company.

In April, Presidential sued MOCJ, Exodus, Watchforce and Dantzler alleging that they had been cheated out of nearly $2 million in payments earned while they were doing that work. The suit, filed by attorney Vincent Miletti, alleges that when Exodus hired Presidential to handle security in early 2021, Dantzler told Presidential’s CEO Ismael Qadar that all “invoices would go through Watchforce, who in turn would pay on behalf of Exodus.”

“Watchforce,” the suit alleges, “would be, in effect, the security manager of the hotel program for Exodus. Dantzler contends that this was the preferred structure according to Exodus, as they had a long term relationship and trust” with him.

Dantzler “served as security manager for Exodus and has been the authorized and responsible party for Exodus on numerous occasions,” the lawsuit states.

Once Watchforce stopped paying Presidential in June 2022, as shown in bank records filed in court, several security guards who had worked unpaid for weeks began filing complaints with the state Department of Labor against Presidential.

Qadar told THE CITY he contacted the Mayor’s Office of Criminal Justice to file a complaint about Watchforce and Exodus but got no response. By then he’d been paid $1.5 million by Watchforce but said he was owed another $1.9 million.

“How come they never sent me an email? How come they never sent me a letter? No response,” he said. “I will never do a project with New York City ever again. This is by far the worst project I’ve ever done. This is the most unethical project I’ve ever done.”

During his interaction with Watchforce, he said, “I never seen nothing with MOCJ’s name on it.” Instead, he says, Dantzler told him, “You have to deal with me to deal with Exodus.” At one point, he says, Dantzler asked him, “Can I lease out your security firm license for other things?” Qadar said no.

In response to Presidential’s lawsuit, Watchforce attorney John Anello in May moved to dismiss the suit, highlighting an agreement signed by Qadar bearing the statement: “we are acknowledging that Watchforce has been paid the full balance due and there is no balance amount remaining for payment.” Presidential’s attorney, Miletti, responded in court filings arguing that Qadar signed the “paid-in-full” agreement “under duress” in the hopes of collecting some of what he was owed. The case is still pending in Manhattan Supreme Court.

Last week Watchforce’s lawyer, Anello, declined to answer THE CITY’s questions about Dantzler’s interactions with Exodus, stating, “I’m not going to be making any comments. I can’t communicate to him. If he doesn’t want to talk to the press, he doesn’t want to talk to the press.”

Exodus’ written response to Landa’s questions about Watchforce and Dantzler remains out of public view. THE CITY requested the documentation from MOCJ but mayoral spokesperson Camile Adolphe declined to provide them, stating only, “MOCJ worked with Exodus to resolve the concerns raised by the Mayor’s Office of Risk Management and Compliance.”

Medina did not respond to written questions about Watchforce and Dantzler submitted several times to him by THE CITY and did not return a call requesting comment. His attorney, Brian Beckerman, also wouldn’t answer the questions, stating, “I’m not going to comment on ongoing litigation.”

Lander in the Dark

Days after THE CITY’s revelations, Adams ordered the inquiry by the Office of Risk Management and DOI. The seriousness of the probe was clear from the start.

At the time, the comptroller’s office was in the process of signing off on a second Exodus contract to continue running the hotel program. For a time in late March, Lander refused to register that contract because MOCJ hadn’t provided proof that the security firms Exodus was planning to use after the unlicensed Global left were licensed by New York State. Ultimately MOCJ provided that proof, and Lander later registered the second contract.

But he did so without knowing anything about Exodus’ secret hiring of Watchforce in the first contract — something MOCJ was aware of but didn’t mention.

In fact, Lander did not become aware of the existence of Watchforce as a secret Exodus subcontractor until more than a year later when City Hall filed its corrective action plan as part of its settlement with Exodus in August 2023. The agreement was signed by MOCJ’s Goldin and Exodus’ Medina as the organization’s CEO — eight months after Medina announced he had tendered his resignation .

THE CITY asked Lander to comment on MOCJ taking more than a year to notify him about the existence of Watchforce as an Exodus subcontractor, and to discuss the issue of Exodus paying Watchforce nearly $4 million more than Watchforce paid the security firms operating at the hotels.

In response, Lander stated, “We expect entities like MOCJ to insist that their vendors report on the existence of subcontractors in a timely and transparent manner. Reports that Exodus appears to have paid Watchforce millions more than Watchforce paid the security firms operating at these hotels raise serious questions of fiscal integrity. I will continue to demand that the City tighten its rules to require stronger accountability from City agencies and prime vendors over their subcontractors.”

Asked why MOCJ took so long to notify the comptroller, Adolphe, the spokesperson for Adams, stated that the mayor’s office was not required to notify the comptroller because Watchforce had not yet been “formalized” as a subcontractor even though Watchforce had already been acting as an Exodus sub for more than a year.

MOCJ’s hotel contract with Exodus would ultimately balloon from $835,000 to $83 million.

Under the corrective action plan signed in August, Exodus agreed to craft a manual of financial protocols to tighten up oversight of its spending and submit it to MOCJ by March 1. The mayor’s office instructed THE CITY to file a Freedom of Information Law request to obtain that manual and has to date not provided a copy.

An audit of 2021 activities filed with the IRS and state attorney general in March 2023 noted that Global Operations Security Inc. and another security firm hired by Exodus did not have valid security guard licenses.

The outside auditor also found “significant deficiencies identified” in Exodus’ “internal controls over major federal programs,” detailing that in 2021 alone, the U.S. Department of Homeland Security covered the city’s costs for the hotel program with $42 million in emergency COVID funds.

Exodus shrugged off the critique, writing, “After careful review of the particular situation cited, the management considers the few instances as exceptional. In an effort to improve the verification procedure, senior management of the Company will review and monitor hiring of contractors and subcontractors.”

Exodus exited the hotel program in December 2022. But despite Risk Management’s documentation that Exodus had violated the city’s procurement rules by secretly hiring and steering millions to Watchforce, MOCJ continued to work with Exodus.

In July 2023, even as MOCJ and Exodus were still ironing out the details of the corrective action plan, MOCJ awarded Exodus yet another contract: $9.8 million to continue providing post-incarceration services to released inmates such as job training and placement.

Meanwhile, precise details of how Exodus spent all the taxpayer money it received for the hotel program may yet emerge. The Department of Investigation began looking into that question in spring 2022 at Adams’ request. A DOI spokesperson declined to comment on the status of that inquiry.

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