Stupid Emails: How Habitat for Humanity Turned a Grant into a Scandal

In 2010, Habitat for Humanity received a $21 million federal grant to help stabilize neighborhoods in central Brooklyn that were hit particularly hard by foreclosures during the financial crisis. The plan was simple: buy vacant, abandoned apartment buildings and renovate them to provide homes for low-income families. But there was a problem—there weren’t any abandoned buildings available.

To make the project work, long-time tenants were evicted from occupied buildings so developers could sell them—often at a small profit—to Habitat. In effect, families in need gained housing at the expense of other equally vulnerable families who were forced into homelessness. According to a ProPublica investigation, four out of the five properties listed as “long vacant” were actually occupied at the time Habitat began purchase negotiations.

Internal emails uncovered during the investigation painted a damning picture. Bill Bogdon, Habitat’s director of real estate, wrote, “The Jefferson building I researched is now vacant, and I am speaking with the owner. The challenge with this one is the recent occupancy.” So, yes—they knew. And worse, they documented it.

Even more telling was this gem from then-Director Josh Lockwood: “There’s zero doubt in my mind that [Katz, the developer tied to the deal] is a bad guy and did bad things… Agreed it’s unlikely that an investigative reporter would target us specifically, but obviously we’d need to be prepared in the event that s/he does.” That’s not damage control. That’s premeditated damage expectation.

If you’re doing something you wouldn’t want investigated, that’s your first clue you probably shouldn’t be doing it. And if you’re emailing about it? That’s just plain stupid.

JP Morgan’s Clever-but-Costly Debt Maneuver

The SEC recently launched a formal investigation into trades involving government debt made by JP Morgan traders—trades that reportedly pushed regulatory boundaries. The two traders involved left the firm earlier this year under the vague explanation of “compliance procedure disagreements,” which is rarely a reassuring sign. FINRA is also conducting its own investigation into both the trades and the circumstances of the traders’ departure.

Here’s what happened: traders wanted to increase JP Morgan’s reserves—though it’s still unclear exactly why. So they got creative. Instead of following the standard valuation committee process, they bundled U.S. Treasuries into “strips”—essentially breaking them down into separate interest and principal components. These strips are considered less liquid than regular Treasuries. By converting liquid assets into less liquid ones, they could technically increase reserve requirements.

It was clever. Too clever. The issue? They sidestepped standard valuation processes and potentially manipulated asset classification to influence reserve figures. The SEC and FINRA are now digging in, and JP Morgan’s vague statement that the traders were “permitted to resign” without further comment isn’t doing them any favors. For a bank already under a microscope, transparency would’ve been the smarter move.

Sports Betting in the Office? Seriously.

Meanwhile, at the same bank, five JP Morgan employees were fired for running a sports betting ring—at work. And not just casual bets; this was a large-scale, well-organized operation with employees reportedly winning and losing up to $10,000 per week.

I’ve worked at a bank. The firm’s stance on illegal sports betting isn’t unclear. It’s the opposite of unclear. It’s “Don’t. Ever. Do. It.” Especially not at work. Especially not at a bank, where regulation and compliance are everyday words.

These employees worked in operations—people who are supposed to understand rules and risk. Yet the group transferred money between Chase accounts in a way that raised red flags, prompting a deeper investigation. JP Morgan found ledgers documenting the betting ring saved on company computers. One employee described the internal investigation as “like CSI.” Except CSI usually solves things in an hour—it reportedly took the bank 6–12 months to connect the dots.

Moral of the story? If you’re going to do something illegal, doing it from your work computer, using your work email, and transferring funds through your employer’s accounts is a surefire way to get caught. That’s not bold—that’s just dumb.

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