‘The Killing Fields of East New York’ Exposes the Slippery Slope of White-Collar Crime
Stacy Horn’s The Killing Fields of East New York opens with a crime that seems at first glance to be entirely unconnected to mortgage fraud. On the evening of July 17, 1991, seventeen-year-old Brooklyn resident Julia Parker was hanging out with her friends on a street corner in East New York when a gunman “walked up, crouched behind her, and fired a shot into her head.”
The story that the local police and community came to believe about Parker’s death was that someone killed her to keep her from talking to the police about neighborhood crimes, or about her involvement in the city’s drug trade. But Horn’s approach is not that of your standard true-crime narrative. Parker’s story, she reveals, is part of a more complicated history best summarized by the book’s subtitle: “The First Subprime Mortgage Scandal, a White-Collar Crime Spree, and the Collapse of an American Neighborhood.”
The Killing Fields of East New York: The First Subprime Mortgage Scandal, a White-Collar Crime Spree, and the Collapse of an American Neighborhood
By Stacy Horn
Gillian Flynn Books/Zando Projects, 320 pages
Release Date: January 28, 2025
Over the course of twenty chapters, Horn connects the dots as diligently as any detective between 1960s-era housing legislation, corruption in the mortgage and banking industries, and an explosion in violent street crime in Brooklyn’s East New York neighborhood beginning in the 1960s and 70s. Connecting those dots is a complex endeavor, which is made clear by the book’s structure. In the first half of each chapter, Horn details the relentless onslaught of murders and other violent unrest and crime that has plagued East New York since at least 1966. But in the chapters’ latter halves, Horn focuses on the concurrent and strongly correlated white-collar crimes perpetrated by bankers, home appraisers, and real estate agents on and around the neighborhood’s housing stock.
East New York was first developed in the 1840s by shoe merchant John Pitkin, who changed the name of the small town from New Lots, and advertised land that “a poor man may purchase in a healthy country, with delightful water, and ocean air, a lot of ground.” The town was annexed by Brooklyn in 1886, and for many decades after, East New York attracted Jewish, German, and Italian immigrant families. In interviews with Horn, former residents who grew up in East New York during the 1940s and 1950s describe their childhoods as idyllic.
Amid the Civil Rights Movement and surging racial unrest of the 1960s, President Lyndon Johnson established the Kerner Commission in 1967 to study the causes of the turmoil; its report, published in 1968, provided “a detailed history of blacks in American society and recommendations for improving the social conditions which foment riots.” The Commission’s conclusion was, in Horn’s estimation, “breathtakingly simple. America is a racist country.”
In the aftermath of the report, two landmark pieces of legislation were passed: the Civil Rights Act of 1968 (also known as the Fair Housing Act), and the Housing and Urban Development Act of 1968 (frequently called the HUD Act). The laws were intended to address housing discrimination practices. Meanwhile, Philip Brownstein, commissioner of the Federal Housing Administration (FHA), told a group of FHA employees that the agency’s “mission of highest order” would become “stimulating a flow of mortgage funds into the inner city, yes, even the slums.”
But the legislation had unintended consequences: The HUD Act offered programs to help low-income families afford a home, particularly in “declining urban areas,” and the FHA, which was responsible for insuring mortgages so that banks would lend to home buyers, then had to “relax their standards” for which loans they would insure. The federal government, Horn explains, had essentially “just created the subprime mortgage business.”
Unscrupulous bankers like Harry and Rose Bernstein, owners of the Eastern Service Corporation—one of the largest mortgage banks in New York—had stumbled onto a gold mine: They could, with their network of bribed white-collar professionals, obtain properties in East New York, have them appraised at fraudulently high prices, find buyers who would likely not be able to keep up with their mortgage payments, foreclose on them, and collect the mortgage insurance promised by the new, more lenient FHA policies. Horn’s methodical detailing of how individuals in several industries exploited government programs and initiatives designed to help low-income families makes up the book’s crux. Even President Donald Trump and his father, Fred, make an appearance, along with the many housing discrimination lawsuits against them.
For East New Yorkers, the fallout from this scheme was swift and brutal. Between 1968 and 1974, the neighborhood was eviscerated, and remained that way for decades. The foreclosures resulting from the scheme sent families into financial ruin, increased the number of vacant buildings where crime flourished, and made it harder for the already stretched police and fire departments to keep up. When Julia Parker was murdered in 1991, she would be one of 116 murders in East New York that year.
Horn, whose previous books include another true crime investigation, The Restless Sleep: Inside New York City’s Cold Case Squad, is straightforward but not sensationalistic when recounting the street crimes with which East New York struggled throughout the latter half of the twentieth century. Many were perpetrated in the neighborhood’s many vacant buildings; too many involved children; a truly disturbing number seemed to end with victims being thrown from the tops of buildings. She is deft at revealing both how the area’s precinct (the 75th, or the “seven-five” in police parlance) was left to investigate crime with too few resources, but also was mired in its own flawed investigations and corruption (the 75th was home to Michael Dowd, who protected drug dealers and eventually became one himself, earning him notoriety as “one of the dirtiest cops in New York City history”).
The Killing Fields of East New York is the first nonfiction title from Gone Girl author Gillian Flynn’s imprint with the independent publisher Zando. In promotional materials for the book, Flynn praised the way in which Horn “unravels how white-collar crime slowly devastated East New York.” “Unravels” is an accurate descriptor, because financial crimes, like the derivatives and mortgage-backed securities the finance industry offers as investment products, are extremely complicated (and are meant to be so, both to discourage regulation and investigation, and to ensure that only the powerful and well-connected can profit from them).
But the experience of reading The Killing Fields of East New York is more akin to watching a narrative being built up, brick by brick. While the book has been marketed as a blend of true crime and investigative reporting, and succeeds on those terms, Horn also offers a fascinating history for those interested in urban planning and community development. Despite the many challenges brought down upon East New York by financial manipulators extracting money from the neighborhood and its government, Horn highlights the stories of community and advocacy groups within the neighborhood, struggling to achieve such small victories as using vacant lots for gardening and pressuring the city to replace its many missing street signs. By the book’s end, Horn leaves her reader with an intricate understanding of how the financial crimes perpetrated on East New York affected the community at every level, from the bottom up.