A real estate developer in Washington, DC, along with a former FBI agent, will face legal consequences following their conviction for plotting to manipulate the housing market. The ex-agent illicitly accessed and disclosed confidential data, accepting bribes from the developer in exchange for private information about renters.
This information was exploited as a means to exploit the Tenant Opportunity to Purchase Act (TOPA), which offers tenants the opportunity to acquire their homes ahead of other prospective buyers when these properties become available for sale.
On October 7, former FBI agent David Paitsel and real estate developer Brian Bailey were convicted on individual charges of bribery and conspiracy. The US Attorney’s Office has indicated that Bailey faces additional counts related to his involvement in the scheme. Paitsel accepted multiple bribes from the real estate developer in exchange for confidential information he had access to through his FBI employment.
To be more specific, this privileged information was sourced from the CLEAR software, an official database containing extensive personal details of US citizens. This software is not accessible to the general public, yet the former FBI agent utilized it to access TOPA records.
According to the Justice Department, TOPA enables tenants to transfer their purchasing rights to a third party while maintaining contact information for all the individuals involved within its protected database. An individual working in real estate with access to insider knowledge about these properties could, in theory, enhance their own portfolio by persuading renters to relinquish their rights and then taking on those third-party positions.
Reportedly, Bailey persuaded a tenant to relinquish their purchasing rights for $500. Subsequently, he informed Paitsel that he would send him $5,000 if he managed to profit from the property. The court determined that Bailey additionally provided substantial payments to Dawne Dorsey, who held the position of program specialist within the District of Columbia Department of Housing and Community Development, in exchange for TOPA leads. Dorsey had previously pleaded guilty to bribery charges in 2019.
On October 18, Paitsel received his sentencing, which included a two-year prison term for each count to be served concurrently, along with an additional two years of supervised release. He is also obligated to pay special assessment fees and forfeitures totaling $10,700. Meanwhile, Bailey was sentenced to four years for each count, also to be served concurrently, and he will undergo two years of supervised release, coupled with assessment fees and fines amounting to $250,100.
Dawne Dorsey’s sentencing is scheduled for November 6.
