SHEEPSHEAD BAY — A Brooklyn man who was a supervisor at housing projects in Sheepshead Bay was arrested Friday for allegedly practicing loan shark tactics on his subordinates, the city’s Department of Investigation announced.

Derek Mitchell, 54, of Brooklyn, was accused of lending two subordinates money at illegal interest rates. Mitchell is a supervisor of caretakers with the New York City Housing Authority (NYCHA), assigned to the Sheepshead Bay-Nostrand Houses. He was suspended from work after being arrested.

“City supervisors cannot lawfully become involved in any kind of financial relationships with their subordinates, much less lend them money at illegal rates of interest, as charged here,� Department of Investigation Commissioner Rose Gill Hearn said.

“When the matter was reported to DOI, our investigators acted to uncover the facts leading to today’s arrest, ensuring that the corrupt activity stopped,� she said.

In February 2009, Mitchell allegedly lent a subordinate $1,000 and required that the loan be paid back with an extra $500, or 50 percent interest.

When the repayment was late, Mitchell then allegedly demanded an additional $1,500 — a 100 percent interest fee.

In another alleged incident that month, Mitchell loaned $200 to a subordinate requiring $50 in interest for every two weeks.

When the amount got to $900, the subordinate paid back the $200, and Mitchell then allegedly demanded an extra $300 for being late.

Mitchell has been a NYCHA employee since 1982. He is charged with criminal usury and official misconduct, and could face up to seven years in prison if convicted.

—Samuel Newhouse
Brooklyn Daily Eagle

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