WASHINGTON, DC (WRIC) — A former FBI agent and DC-based real estate agent were both found guilty last week in a scheme to bribe a federal bureaucrat in exchange for confidential real estate information.
David Paitsel, 41, was a special agent at the FBI’s Charlotte Field Office in North Carolina when he conspired with Brian Bailey, 52, a DC real estate developer, to bribe a federal official overseeing housing policy in the District in exchange for confidential information that could give Bailey a leg up in business.
Beating the Market
The information in question was a set of lists of DC tenants who received an “offer of sale” under a DC law, the Tenant Opportunity to Purchase Act (TOPA), that gave them right of first refusal when their landlord sought to sell the home they lived in.
Importantly, the right of first refusal could be used by the tenant to purchase their home for market value — or sold to a developer so that they could do the same, without having to compete with other buyers.
That made the information about which DC tenants had received those offers incredibly valuable to Bailey, who could swoop in and offer to buy the rights of first refusal before anyone else even realized they were up for sale.
So, Bailey approached Dawne Dorsey, a bureaucrat with the DC Department of Housing and Community Development, with a plan. He asked her to provide the unredacted lists of all offers of sale that had been made under TOPA, and in return, he would pay Dorsey for each update.
In total, Bailey eventually paid her over $7,000 from 2016 to 2018. Dorsey pleaded guilty to accepting those bribes in 2019, and in a statement of facts described her interactions with Bailey.
But there was still a problem. While the lists provided names and addresses, they didn’t include contact information. That’s where David Paitsel stepped in.
The House on 15th Street
On May 3, 2017, Dorsey, as she had done many times before, sent Bailey a notice of sale. It was for a home on 15th Street, in DC’s Columbia Heights neighborhood.
A week later, on May 11, Bailey sent an email to Paitsel asking for contact information for “TM,” one of the residents of the property who had right of first refusal. The text of those emails was included in an affidavit filed ahead of Bailey and Paitsel’s arrests.
“See if you can get a number on this guy,” he wrote.
That same night, Paitsel logged into the CLEAR database — a law enforcement tool containing personal contact information and other personal data — and searched for the tenant, turning up a number and address.
But the number, Bailey found, was disconnected.
“The number was disconnected…email address anything. Would be good,” Bailey wrote on May 12.
Again, Paitsel performed the search on Bailey’s behalf. He found a new number, and this time, it worked. Bailey called TM and eventually paid them $10,000 in return for their right of first refusal.
In June, Bailey wrote to Paitsel, ““Hey Bro… I owe you 5k!!! I found [“T.M.”] … He assigned his rights over to me. I’m going to flip the contract to another investor.”
But the $15,500 Bailey paid (Dorsey received $500 for the information) was nothing compared to the windfall he got later that year.
In December, he sold the right of first refusal to another developer for $251,465. According to an indictment against Bailey and Paitsel, the rights to other properties were sold in the $40,000 to $50,000 range.
Brian Bailey was found guilty at a jury trial of four counts of bribery and conspiracy to commit bribery, while David Paitsel was found guilty on two counts of the same.