type: other

jurisdiction: US

text: b' Office of Inspector General\n U.S\n .S.. Department of Housin\n Department g and Urban De\n Housing velopment\n Dev\n\n\nSemiannual Report\n to Congress\n April 1, 2006, through September 30, 2006\n\x0c Pr ofile of Perf\n Profile or\n Perfor mance\n ormance\n For the Period, April 1, 2006, through September 30, 2006\n Audit and Investigation Results Audit Investigation Hotline Last 6 Months FY 2006\n\n Recommendations That Funds Be Put to Better Use1-2 $322,886,137 $4,514,185 $327,400,322 $919,640,953\n Recommended Questioned Costs1-2 $68,039,117 $68,039,117 $120,262,848\n Indictments/Informations 712 712 1,459\n Convictions/Pleas/Pre-Trial Diversions 512 512 955\n Civil Actions 20 20 53\n Investigative Recoveries/Receivables $81,726,077 $152,495 $81,878,572 $247,314,466\n Funds Put to Better Use $48,608,555 $48,608,555 $116,084,299\n Collections from Audits $14,474,522 $14,474,522 $42,685,397\n 3\n Administrative Sanctions 3 947 950 2,137\n Personnel Actions 16 16 40\n 4\n Arrests 2,034 2,034 3,570\n Search Warrants 44 44 102\n Weapons Seized 4 4 7\n Subpoenas Issued 6 431 437 889\n1\n This represents all cost transactions during the period in which dollar amounts were reported with any recommendation.\n2\n For recommendations that Funds Be Put To Better use, $210,642,087 had Management Decisions. Of\n the Recommended Questioned Costs, $39,449,411 had Management Decisions. Recommended and Management Decision amounts differ because not\n all Recommendations had received final determination at the end of the period, and there were some management decisions agreed to on recommendations\n from previous periods.\n3\n Personnel actions include reprimands, suspensions, demotions, or terminations of the employees of Federal, state, or local governments, or of Federal\n contractors and grantees, as the result of OIG activities. In addition, this reporting category includes actions by Federal agencies to suspend, debar, or\n exclude parties from contracts, grants, loans, and other forms of financial or non-financial transactions with the government, based on findings produced\n by the OIGs.\n4\n Included in the arrests is our focus on the nationwide Fugitive Felon Initiative.\n\x0cInspector General\xe2\x80\x99\n General\xe2\x80\x99ss Message\n Messag\n It is with great pride that I present the U.S. Department of\n Housing and Urban Development (HUD) Office of Inspector\n General (OIG) Semiannual Report to the Congress for the second\n half of fiscal year 2006.\n\n During the reporting period, we had $327.4 million in funds\n put to better use, $68 million in questioned costs, and $81.8\n million in recoveries and receivables. This is exceptional work by\n our staff that has resulted in a significant positive impact on fraud\n and misuse of taxpayer dollars. I am grateful to the auditors,\n agents, and evaluators who worked so hard this year to achieve\n this milestone.\n\n I direct your attention to our high profile audits and investigations. HUD OIG staff\nincreased and improved their cooperation and collaboration with the Department and, as\na result, developed and implemented better and more effective audit recommendations.\n\n At this time, HUD OIG has taken inventory of our various interests and concerns\nregarding HUD programs. We have several concerns in each program area, but I will\nrelate only our chief issues.\n\n The largest HUD program in terms of economic impact is the Federal Housing\nAdministration (FHA) mortgage insurance program. A recent audit found that HUD\npaid billions for claims in the single-family FHA mortgage insurance program, a large\npercentage of which were for mortgages that did not meet program requirements. HUD\nreceived and paid claims on loans for which the lender did not show that the borrower 1)\nwas able to make the required monthly payments, 2) made the minimum investment in\nthe property, or 3) was creditworthy. We estimate that final HUD costs for claims that did\nnot meet program requirements totaled $356 million.\n\n HUD\xe2\x80\x99s most well-known program is its public and assisted housing. Presently, we\nare concerned with the adequacy of the Department\xe2\x80\x99s inspections of public housing\nauthorities (PHA) for compliance with the national housing quality standards. We are\nfinding that PHAs are not satisfying their responsibility to ensure that units are decent,\nsafe, and sanitary.\n\n We are also concerned with oversight of public housing operations. A case in point is a\nChicago Housing Authority Section 8 landlord who was also a Chicago police officer, as well\nas a former president of a nonprofit organization approved by HUD to acquire discounted\nHUD properties. An investigation by HUD OIG led to a conviction on seven counts of\nbankruptcy fraud. This landlord did not report her nonprofit business, extensive proceeds\nfrom the resale of HUD properties, Section 8 rental assistance payments, or income from her\nemployment with the Chicago Police Department and various nursing companies on two\ndistinct bankruptcy petitions.\n\n HUD\xe2\x80\x99s Community Development Block Grant program has not shown consistency in\nmonitoring the performance of communities that get these funds for development. HUD\n\n\nInspector General\xe2\x80\x99s Message iii\n\x0c OIG believes that implementation of performance standards for grantees and a\n restructuring of enforcement procedures/remedies is needed.\n\n During the months ahead, HUD OIG is increasing its efforts to ensure the\n administrative health and vitality of HUD\xe2\x80\x99s programs and activities. I know that with the\n hard work of the staff, we will continue a pattern of improved oversight and enforcement.\n\n We are justifiably proud of the staff of HUD OIG for their tireless work and activities\n against waste, fraud, and abuse in the Nation\xe2\x80\x99s housing and urban development programs.\n\n\n\n\n Kenneth M. Donohue\n Inspector General\n\n\n\n\niv Inspector General\xe2\x80\x99s Message\n\x0cStrategic Plan\nStrategic\n Vision\n We are a trusted and respected resource for HUD, Congress, and the American\n public in ensuring the integrity, efficiency, and effectiveness of HUD\n programs and operations. We are committed to working jointly with\n HUD management to achieve their goals.\n\n\n\n Mission\n \xc2\x84 Promote the integrity, efficiency, and effectiveness of HUD programs and\n operations to assist the Department in meeting its mission.\n \xc2\x84 Detect and prevent waste, fraud, and abuse.\n \xc2\x84 Seek administrative sanctions, civil recoveries and/or criminal prosecution\n of those responsible for waste, fraud, and abuse in HUD programs and\n operations.\n\n\n\n Goal 1 Goal 2 Goal 3\n Effecti\n Effecti veness\n ectiv Efficiencyy\n Efficienc Employyees\n Our Emplo\n Help HUD resolve its \xe2\x80\x9cMajor Maximize results and Become the \xe2\x80\x9cEmployer\n Management Challenges\xe2\x80\x9d provide responsive audit of Choice\xe2\x80\x9d among\n by being a relevant and and investigative work Offices of Inspectors\n problem-solving advisor to for mandated, requested, General.\n HUD and our Stakeholders. or self-initiated efforts.\n\n\n\n\n Objectives\n Objectiv\n \xc2\x84 Contribute to Improving \xc2\x84 Achieve a highest \xc2\x84 Invest in people.\n the Integrity in Single Return on Investment \xc2\x84 Invest in the\n Family Insurance (ROI) with available organization.\n Programs. resources.\n \xc2\x84 Contribute to a Reduction \xc2\x84 Provide quality\n in Erroneous Payments in results to customers\n the Rental Assistance in a timely manner.\n Programs.\n \xc2\x84 Contribute to Improving\n HUD\xe2\x80\x99s Execution and\n Accountability of Fiscal\n Responsibilities.\n \xc2\x84 Contribute to resolving\n significant issues raised\n or confronted by HUD\n and our Stakeholders.\n\n\nStrategic Plan v\n\x0c Strategic Goals\n Strategic\n Goal 1 - Effecti\n Effectiveness\n ectiv\n Objectives:\n Contribute to improving the integrity of single-family insurance programs.\n Contribute to a reduction in erroneous payments in the rental assistance\n programs.\n Contribute to improving HUD\xe2\x80\x99s fiscal accountability.\n Contribute to resolving other significant issues raised or confronted by HUD and our\n stakeholders.\n Target As of\n September Key Measurements\n 30, 2006\n 75% 3 75% of the recommendations reach management decisions within 120 days.\n\n 85% 3 85% of the dollars associated with recommendations are sustained.\n\n 80% 3 80% of all audits conducted are targeted at areas of significant interest to\n either HUD or OIG stakeholders.\n\n 80% 3 80% of stakeholders rate OIG products and services good or better.\n\n 66% 3 66% investigations referred for criminal, civil, or administrative action will\n focus on FHA single-family mortgage fraud and Section 8 rental assistance\n overpayment.\n\n Goal 2 - Efficienc\n Efficiencyy\n Objectives:\n Maintain a high return on investment (ROI).\n Provide timely and quality results to customers.\n Target As of\n September Key Measurements\n 30, 2006\n 8:1 3 Sustain a return on investment (ROI) of 8:1.\n\n 70% 3 70% of external audits completed within 2000 hours.\n\n 4/6 3 Regional investigative performance for regions without forensic auditors\n Actions will average 4 actions per FTE per year. Regions with forensic auditors will\n per FTE average 6 actions per FTE per year..\n\n Goal 3- Emplo\n Employyer of Choice\n Objectives:\n Invest in people.\n Invest in the organization.\n Target As of\n September Key Measurements\n 30, 2006\n FY 07 On Schedule Implement a leadership development program for succession planning.\n 80% NEW 80% of employees rate organization good or better.\n\n\nvi Strategic Goals\n\x0c Audit Repor ts Issued bbyy Pr\n Reports Proogram\n\n Other\n Single-Family\n Hurricane Relief Programs\n Housing\n Oversight 4%\n 19%\n Community 3% Multifamily\n Planning &\n Housing\n Development\n 9%\n 12%\n\n\n\n\n Public and Indian\n Housing\n 53%\n\n\n\n Monetar\n Monetaryy Benefits Identified bbyy Pr\n Proogram\n\n Other Programs\n Community\n 0%\n Planning Hurricane Relief\n & Development Oversight\n 4% 0%\n Public & Indian\n Housing\n 28%\n\n\n\n\n Multifamily Single-Family\n Housing Housing\n 12% 56%\n\n\n\n\n Monetar\n Monetaryy Benefits Identified in Millions of Dollar\n Dollarss\n\n 250\n $219\n 200\n\n\n 150\n $108\n 100\n\n\n 50\n $47\n $15 $0 $1\n 0\n Single Multifamily Public and Community Hurricane Other\n Family Housing Indian Planning & Relief Programs\n Housing Housing Development Oversight\n\n\n\n\nAudit Charts vii\n\x0c Investi\n Inv gation Cases Opened bbyy Pr\n estig Proogram (Total: 576)\n\n Community Planning Other/GNMA\n & Development 3% (15)\n 7% (42) Single-Family\n Housing\n 13% (77)\n\n\n\n\n Multifamily\n Housing\n 9% (54)\n\n Public and Indian Housing\n 68% (388)\n\n\n\n\n Investi\n Inv gation Reco\n estig veries bbyy Pr\n Recov Proogram (Total: 81,726,077)\n Multifamily Community Planning &\n Housing Development\n 8% ($6,472,308) 6% ($4,617,997)\n\n\n\n\n Public & Indian\n Housing\n 10% ($7,855,917)\n Single-Family\n Housing\n 76% ($62,779,855)\n\n\n\n\nviii Investigation Charts\n\x0cAcr on\nAcron yms List\n onyms\nAIGA Assistant Inspector General for Audit\nAIGI Assistant Inspector General for Investigations\nARIGA Assistant Regional Inspector General for Audit\nASAC Assistant Special Agent in Charge\nATFE Bureau of Alcohol, Tobacco, Firearms, and Explosives\nCAS Computer Audit Specialist\nCDBG Community Development Block Grants\nCID Criminal Investigation Division\nCPD Community Planning and Development\nDAIGA Deputy Assistant Inspector General for Audit\nDAIGI Deputy Assistant Inspector General for Investigation\nDEA Drug Enforcement Administration\nDHS Department of Homeland Security\nDIG Deputy Inspector General\nDoD Department of Defense\nDOE Department of Education\nDOJ U.S. Department of Justice\nDROD Disaster Relief Oversight Division\nDUI Driving Under the Influence\nEIV Enterprise Income Verification\nFBI Federal Bureau of Investigation\nFDIC Federal Deposit Insurance Corporation\nFEMA Federal Emergency Management Agency\nFFMIA Financial Management Improvement Act of 1996\nFHA Federal Housing Administration\nFIRMS Facilities Integrated Resources Management System\nFISMA Federal Information Security Management Act of 2002\nFY Fiscal Year\nGAO Government Accountability Office\nHHS U.S. Department of Health and Human Services\nHOME Home Ownership Made Easy\nHOPWA Housing Opportunities for Persons with AIDS\nHUD U.S. Department of Housing and Urban Development\n\n\n\nAcronyms List ix\n\x0c ICE Immigration and Customs Enforcement\n IG Inspector General\n IRS Internal Revenue Service\n KDHAP Katrina Disaster Housing Assistance Program\n MTW Moving to Work\n NAHRO National Association of Housing and Redevelopment Officials\n OA Office of Audit\n OI Office of Investigation\n OIG Office of Inspector General\n OMB Office of Management and Budget\n OTND Officer/Teacher Next Door\n PCIE/ECIE President\xe2\x80\x99s Council on Integrity and Efficiency/Executive Council on\n Integrity and Efficiency\n PFCRA Program Fraud Civil Remedies Act\n PHA Public Housing Authorities\n PHSI Public Housing Safety Initiatives\n PIH Office of Public and Indian Housing\n REO Real Estate Owned\n RHIIP Rental Housing Integrity Improvement Project\n RIGA Regional Inspector General for Audit\n SA Special Agent\n SAC Special Agent in Charge\n SBA Small Business Administration\n SFA Supervisory Forensic Auditor\n SSA Social Security Administration\n SSN Social Security Number\n TSA Transportation Security Administration\n USAO U.S. Attorney\xe2\x80\x99s Office\n USDA U.S. Department of Agriculture\n USMS U.S. Marshals Service\n USPS U.S. Postal Service\n USPIS U.S. Postal Inspection Service\n VA U.S. Department of Veterans Affairs\n\n\n\n\nx Acronyms List\n\x0cTable of Contents\nChapter 1 - HUD\xe2\x80\x99s Management and Performance Challenges 1\n The HUD Office of Inspector General 2\n Major Issues Facing HUD 2\nChapter 2 - HUD\xe2\x80\x99s Single Family Housing Programs 9\n Audits 10\n Investigations 16\nChapter 3 - HUD\xe2\x80\x99s Public and Indian Housing Programs 31\n Audits 32\n Investigations 49\nChapter 4 - HUD\xe2\x80\x99s Multifamily Housing Programs 75\n Audits 76\nInvestigations 80\nChapter 5 - HUD\xe2\x80\x99s Community Planning and Development Programs 85\n Audits 86\n Investigations 91\nChapter 6 - Hurricane Relief Oversight 97\nChapter 7 - Other Significant Audits and Investigations/OIG Hotline 117\n Audits 118\n Investigations 120\n OIG Hotline 120\nChapter 8 - Outreach Efforts 123\nChapter 9 - Review of Policy Directives 137\n Proposed Rules 138\n Notices 138\n Mortgagee Letter 138\nChapter 10 - Audit Resolution 141\n Delayed Actions 142\n Federal Financial Management Improvement Act of 1996 143\nAppendix 1 - Audit Reports Issued 145\nAppendix 2 - Tables 153\nAppendix 3 - Index 173\nHUD OIG Operations Telephone Listing 177\n\n\n\n\nTable of Contents xi\n\x0c Repor tin\n Reportin g Requir\n ting ements\n Requirements\n The specific reporting requirements as prescribed by the Inspector General Act of 1978,\n as amended by the Inspector General Act of 1988, are listed below:\n Source/Requirement Pages\n Section 4(a)(2)-review of existing and proposed legislation and regulations. 137-139\n Section 5(a)(1)-description of significant problems, abuses, and 1-122, 137-143\n deficiencies relating to the administration of programs and operations\n of the Department.\n Section 5(a)(2)-description of recommendations for corrective action with respect 9-122\n to significant problems, abuses, and deficiencies.\n Section 5(a)(3)-identification of each significant recommendation Appendix 2, Table B\n described in previous semiannual report on which corrective action\n has not been completed.\n Section 5(a)(4)-summary of matters referred to prosecutive authorities 9-122\n and the prosecutions and convictions that have resulted.\n Section 5(a)(5)-summary of reports made on instances where information No Instances\n or assistance was unreasonably refused or not provided, as required by\n Section 6(b)(2) of the Act.\n Section 5(a)(6)-listing of each audit report completed during the Appendix 1\n reporting period, and for each report, where applicable, the total\n dollar value of questioned and unsupported costs and the dollar value of\n recommendations that funds be put to better use.\n Section 5(a)(7)-summary of each particularly significant report 9-122\n and the total dollar value of questioned and unsupported costs.\n Section 5(a)(8)-statistical tables showing the total number of Appendix 2, Table C\n audit reports and the total dollar value of questioned and\n unsupported costs.\n Section 5(a)(9)-statistical tables showing the total number of audit Appendix 2, Table D\n reports and the dollar value of recommendations that funds be put\n to better use by management.\n Section 5(a)(10)-summary of each audit report issued before the Appendix 2, Table A\n commencement of the reporting period for which no management\n decision had been made by the end of the period.\n Section 5(a)(11)-a description and explanation of the reasons for No Instances\n any significant revised management decisions made during the\n reporting period.\n Section 5(a)(12)-information concerning any significant management No Instances\n decision with which the Inspector General is in disagreement.\n Section 5(a)(13)-the information described under section 05(b) of the 143\n Federal Financial Management Improvement Act of 1996.\n\n\nxii Reporting Requirements\n\x0c Chapter 1\n HUD\xe2\x80\x99\n HUD\xe2\x80\x99ss Mana\n Managgement\nand Perfor\n Performance Challen\n ormance ges\n Challeng\n\x0c The HUD Office of Major Issues FFacin\n acing HUD\n acing\n Inspector General The Department\xe2\x80\x99s primary mission is to\n expand housing opportunities for American\n The U.S. Department of Housing and\n families seeking to better their quality of life.\n Urban Development (HUD) Inspector\n HUD seeks to accomplish this through a\n General is one of the original 12 Inspectors\n wide variety of housing and community\n General authorized under the Inspector\n development grant, subsidy, and loan\n General Act of 1978. Over the years, the\n programs. HUD\xe2\x80\x99s fiscal year (FY) 2007\n Office of Inspector General (OIG) has forged\n budget request is about $34 billion.\n a strong alliance with HUD personnel\n Additionally, HUD assists families in\n in recommending ways to improve\n obtaining housing by providing Federal\n departmental operations and in prosecuting\n Housing Administration (FHA) mortgage\n program abuses. OIG strives to make a\n insurance for single-family and multifamily\n difference in HUD\xe2\x80\x99s performance and\n properties. At the end of FY 2006, FHA\xe2\x80\x99s\n accountability. OIG is committed to its\n outstanding mortgage insurance portfolio\n statutory mission of detecting and\n was about $396 billion. The Government\n preventing fraud, waste, and abuse and\n National Mortgage Association, also known\n promoting the effectiveness and efficiency\n as Ginnie Mae, through its mortgage-backed\n of government operations. While\n securities program, gives issuers access to\n organizationally located within the\n capital markets through the pooling of\n Department, OIG operates independently\n federally insured loans.\n with separate budgetary authority. This\n independence allows for clear and objective\n HUD relies upon numerous partners for\n reporting to the Secretary and the Congress.\n the performance and integrity of a large\n OIG\xe2\x80\x99s activities seek to\n number of diverse programs. Among these\n partners are hundreds of cities that manage\n Promote efficiency and effectiveness in HUD\xe2\x80\x99s Community Development Block\n programs and operations, Grant (CDBG) funds, hundreds of public\n housing authorities that manage assisted\n Detect and deter fraud and abuse, housing funds, thousands of HUD-\n approved lenders that originate and service\n Investigate allegations of misconduct FHA-insured loans, and hundreds of Ginnie\n by HUD employees, and Mae mortgage-backed securities issuers that\n provide mortgage capital.\n Review and make recommendations\n regarding existing and proposed Achieving HUD\xe2\x80\x99s mission continues to\n legislation and regulations affecting be an ambitious challenge for its limited\n HUD. staff, given the agency\xe2\x80\x99s diverse mission, the\n thousands of program intermediaries\n The Executive Office and the Offices of assisting the Department in this mission,\n Audit, Investigation, Counsel, and and the millions of beneficiaries in its\n Management and Policy are located in housing programs. HUD\xe2\x80\x99s management\n Headquarters. Also, the Offices of Audit problems have for years kept it on the\n and Investigation have staff located in eight Government Accountability Office\xe2\x80\x99s (GAO)\n regions and numerous field offices. list of agencies with high-risk programs.\n More specifically, HUD must focus\n improvements on rental housing assistance\n programs and single-family housing\n\n\n2 HUD\xe2\x80\x99s Management and Performance Challenges\n\x0cmortgage insurance programs, two areas in Department. OIG submitted its latest\nwhich financial and programmatic exposure assessment on October 19, 2006. These\nare the greatest. The fact that HUD\xe2\x80\x99s reported challenges are the continued focus\nreported management challenges are of our audit and investigative efforts. HUD\nincluded as part of the President\xe2\x80\x99s is working to address these challenges and\nManagement Agenda\xe2\x80\x99s governmentwide in some instances, has made significant\nand program initiatives is indicative of progress in correcting them. The\nHUD\xe2\x80\x99s important role in the federal sector. Department\xe2\x80\x99s management challenges and\nHUD\xe2\x80\x99s current administration places a high current efforts to address these challenges\npriority on achieving presidential and are as follows.\nsecretarial initiatives as well as correcting\nweaknesses that put HUD on GAO\xe2\x80\x99s high- Financial Management Systems. Since\nrisk list. FY 1991, OIG has annually reported on the\n lack of an integrated financial system in\n As of the end of FY 2006, HUD\xe2\x80\x99s compliance with all federal financial\nPresident\xe2\x80\x99s Management Agenda scoring management system requirements,\nstatus for the nine applicable initiatives including the need to enhance FHA\xe2\x80\x99s\nconsisted of three \xe2\x80\x9cgreen,\xe2\x80\x9d four \xe2\x80\x9cyellow,\xe2\x80\x9d management controls over its various\nand two \xe2\x80\x9cred\xe2\x80\x9d baseline goal scores. Based insurance and other financial systems.\nupon a comprehensive set of standards, an During the past several years, HUD has\nagency is \xe2\x80\x9cgreen\xe2\x80\x9d if it meets all of the made progress, implementing a new\nstandards for success, \xe2\x80\x9cyellow\xe2\x80\x9d if it has financial system at FHA and addressing\nachieved some but not all of the criteria, and most of the weaknesses that OIG identified,\n\xe2\x80\x9cred\xe2\x80\x9d if it has one of a number of serious including initiating a vision statement for a\nflaws. HUD\xe2\x80\x99s baseline score for Improved departmentwide fully integrated financial\nFinancial Performance remains at \xe2\x80\x9cred\xe2\x80\x9d system. These improvements enabled OIG\nuntil HUD eliminates its two remaining to reclassify the weakness in financial\nmaterial weaknesses. However, HUD\xe2\x80\x99s management system requirements from a\nprogress indicator is green since HUD has material weakness to a reportable condition.\ncompleted its planned actions, including The remaining weaknesses noted in OIG\xe2\x80\x99s\nreaching an agreement with the Office of audit of HUD\xe2\x80\x99s FY 2005 financial statements\nManagement and Budget (OMB) on HUD\xe2\x80\x99s were as follows:\nIntegrated Financial Management\nImprovement Project (HIFMIP) acquisition FHA needs to continue progress to\nstrategy and replacing its noncompliant integrate its financial management\nLoan Accounting System (LAS) with a systems.\ncompliant commercial off-the-shelf\npackage. It is also noteworthy that HUD HUD\xe2\x80\x99s ability to prepare financial\nwas the first agency to receive a \xe2\x80\x9cgreen\xe2\x80\x9d statements and other financial\nbaseline goal score on the Eliminating information requires extensive\nImproper Payments initiative and has also compensating procedures.\nachieved \xe2\x80\x9cgreen\xe2\x80\x9d baseline goal scores for the\nE-Government and Faith-Based Community\n HUD has limited availability of\ninitiatives.\n information to assist management in\n effectively managing operations on an\n Each year in accordance with the\n ongoing basis.\nReports Consolidated Act of 2000, HUD OIG\nis required to submit a statement to the\nSecretary with a summary assessment of the For the past several years, OIG\xe2\x80\x99s\nmost serious challenges facing the financial audits have also reported\n\n\n\nHUD\xe2\x80\x99s Management and Performance Challenges 3\n\x0c weaknesses in internal controls and secu- Publishing a final rule that\n rity over HUD\xe2\x80\x99s general data processing changes HUD\xe2\x80\x99s delinquency-reporting\n operations and specific applications. The requirement, thereby enabling the\n effect of these weaknesses is that HUD Department\xe2\x80\x99s Single Family Default\n cannot be reasonably assured that system Monitoring System to track significant\n information will remain confidential, key events between the beginning of a\n protected from loss, and available to those default episode and its resolution.\n who need it without interruption. HUD has\n completed certification and accreditation for Publishing a final rule prohibiting\n all financial management systems and property flipping in HUD\xe2\x80\x99s single-\n general support systems. However, the family mortgage insurance programs.\n quality of the underlying documents and the\n actual certification and accreditation process\n Providing special expanded loss\n varied by application. While a number of\n mitigation authority to lenders to\n vulnerabilities were closed, additional\n reduce insurance claim losses and\n vulnerabilities, identified through oversight\n assist borrowers that lost homes due\n activities, were not corrected before\n to hurricane damage in the Gulf Coast\n accreditation. Correction of approximately\n 85 percent of the vulnerabilities identified region.\n on financial management systems within\n FHA has been delayed with no projected At OIG\xe2\x80\x99s urging and in light of a\n resolution date. Finally, HUD has not tested recent Internal Revenue Service\n and evaluated all of the technical ruling regarding nonprofits that\n information security controls for the provide seller-funded downpayment\n financial management systems categorized assistance, proposing a rule that would\n as high impact. establish specific standards regarding\n a borrower \xe2\x80\x99s investment in the\n FHA Single Family Origination. FHA\xe2\x80\x99s mortgaged property when a gift is\n single-family mortgage insurance programs provided by a nonprofit organization.\n enable millions of first-time, minority,\n low-income, elderly, and other underserved While GAO and OIG have reported\n households to realize the benefits of improved monitoring of lender\n homeownership. HUD manages about $341 underwriting and default tracking and\n billion in single-family insured mortgages. expanded loss mitigation to help reduce\n Effective management of this high-risk mortgage foreclosures, HUD needs to\n portfolio represents a continuing challenge further strengthen lender accountability and\n for the Department. The President\xe2\x80\x99s take strong enforcement actions against\n Management Agenda has committed HUD program abusers that victimize first-time\n to tackling long-standing management and minority homebuyers. The audit of\n problems that expose FHA homebuyers to FHA\xe2\x80\x99s FY 2005 financial statements also\n fraudulent practices. HUD has taken a reported a need to\n number of recent actions to reduce risks\n including the following: Incorporate better risk factors and\n monitoring tools into FHA\xe2\x80\x99s single-\n Providing advisory guidance to Home family insured mortgage program risk\n Equity Conversion Mortgage (HECM) analysis and liability estimation\n counselors on warning prospective process and\n borrowers about mortgage fraud\n schemes and how to avoid becoming\n victims.\n\n\n4 HUD\xe2\x80\x99s Management and Performance Challenges\n\x0c Continue improvement in the review Public and Assisted Housing Program\n over the credit reform estimation Administration. HUD provides housing\n process. assistance funds under various grant and\n subsidy programs to public housing\n OIG\xe2\x80\x99s internal audits focused on HUD\xe2\x80\x99s agencies and multifamily project owners.\nimproving its oversight of the claims These intermediaries, in turn, provide\npayment process and the late endorsement housing assistance to benefit primarily low-\nof loans. OIG\xe2\x80\x99s review of HUD\xe2\x80\x99s oversight income households. HUD monitors these\nof single-family mortgage insurance claims intermediaries\xe2\x80\x99 administration of the\nfound documentation omissions and other assisted housing programs.\nlender noncompliance with program\nrequirements at insurance endorsement. Accurate and timely information about\nTherefore, OIG recommended that HUD households participating in HUD housing\nindependently verify the eligibility for programs is necessary to allow HUD to\ninsurance of inadequately documented loan monitor the effectiveness of the program,\nfiles and seek recovery or satisfactory assess agency compliance with regulations,\nsupport for final HUD costs. In another and analyze the impacts of proposed\naudit, OIG assessed the impact of a recent program changes. The level of reporting is\npolicy change regarding eligibility for late a criterion for housing agencies\xe2\x80\x99\nendorsements and found that HUD\xe2\x80\x99s performance in both the Public Housing\nunderlying risk assumption was flawed. Assessment System and the Section 8\nOIG recommended that HUD reevaluate the Management Assessment Program.\npolicy using appropriate and available Housing agencies must have a minimum 95\ninformation. percent reporting rate or be subject to\n sanctions.\n In support of HUD and the President\xe2\x80\x99s\nManagement Agenda, OIG\xe2\x80\x99s Strategic Plan HUD\xe2\x80\x99s ability to effectively monitor\nfor FY 2004 to 2009 gives priority to detecting housing agencies and assisted multifamily\nand preventing fraud in FHA mortgage projects continues to present challenges in\nlending through targeted audits and achieving the intended statutory purposes\ninvestigations. OIG\xe2\x80\x99s audits target lenders of the housing assistance funds. These\nwith high default rates. OIG\xe2\x80\x99s detailed weaknesses have been reported for a\ntesting typically focuses on mortgage loans number of years in OIG\xe2\x80\x99s annual audits of\nthat defaulted and resulted in FHA HUD\xe2\x80\x99s financial statements. However, HUD\ninsurance losses. Results from these audits has demonstrated significant progress in\nhave noted significant lender underwriting addressing weaknesses impacting the\ndeficiencies, prohibited late endorsed loans, accuracy of payments made under these\ninadequate quality controls, and other programs. Most notably, HUD was the first\noperational irregularities. During FY 2006, agency to receive a \xe2\x80\x9cgreen\xe2\x80\x9d baseline goal\nOIG completed 33 external audits of FHA- score on the President\xe2\x80\x99s Management\napproved mortgage lenders as well as five Agenda \xe2\x80\x93 Eliminating Improper Payments\ninternal audits of single-family program initiative and has maintained this score.\nactivities. OIG recommended monetary\nrecoveries, civil remedies, and funds that The estimate of erroneous payments\ncould be put to better use totaling $259 that HUD reports in its Performance and\nmillion. During FY 2006 in the single-family Accountability Report relates to HUD\xe2\x80\x99s\nhousing program area, judicial actions taken inability to ensure or verify the accuracy of\non Office of Investigation cases included 366 subsidy payments being determined and\nindictments/informations. paid to assisted households. HUD has\n surpassed interim goals for reducing the FY\n\n\nHUD\xe2\x80\x99s Management and Performance Challenges 5\n\x0c 2000 estimated $2 billion in net annual rental Administering Programs Directed\n housing assistance overpayments. HUD\xe2\x80\x99s Toward Victims of Hurricanes Katrina,\n interim goals were for a 15 percent Rita, and Wilma. In the aftermath of\n reduction in FY 2003, 30 percent reduction Hurricanes Katrina, Rita, and Wilma, the\n in FY 2004, and 50 percent reduction in FY operations of HUD have been thoroughly\n 2005. These goals were established tested in the Gulf Coast area and have\n based on the FY 2000 estimates of created extraordinary challenges for the\n improper payments attributed to both residents, HUD employees, and the business\n housing administrator errors in subsidy community. The potential losses to HUD\n determinations and tenant underreporting and its housing and community\n of income upon which benefits are based. development programs are significant.\n\n Although 60 percent of all subsidy Congress estimates that damage to\n determinations were found to be in error in residential structures will range from $17 to\n 2000, that number declined to 41 percent in $33 billion. In the Presidentially Declared\n FY 2003 and 34 percent in FY 2004. The Disaster Areas, HUD\xe2\x80\x99s FHA single-family\n baseline estimate of gross annual improper insurance fund insured more than 328,000\n payments has been reduced from $3.2 mortgages having an unpaid principal\n billion in 2000 to $1.6 billion in 2003 and $1.2 balance of $23 billion. The hurricanes\n billion in 2004. HUD is finalizing updated affected 79 Ginnie Mae issuers, causing\n estimates to include in its FY 2006 Ginnie Mae to assess a $500 million risk of\n Performance and Accountability Report. loss to its investment portfolio. FHA\xe2\x80\x99s\n multifamily program in the Presidentially\n Paralleling HUD efforts, our Declared Disaster Areas insured 528 projects\n investigative and audit focus is with an amortized principal balance of $3\n concentrating on fraudulent practices and billion. Of these, 112 or 21 percent sustained\n the lack of compliance with the Section 8 more than minor damage, resulting in\n program statute and requirements. To significant potential losses.1 Assets of HUD\xe2\x80\x99s\n comply with a congressional request, OIG public housing program suffered\n conducted 51 external audits of the Section tremendous damage, affecting both\n 8 Housing Choice Voucher program during property structures and housing of almost\n FY 2006. OIG also has professional 120,000 families. The Housing Authority of\n appraisers on staff to assist in evaluating New Orleans received a $21.8 million grant\n housing quality requirements as part of our from the public housing capital fund reserve\n audit efforts. In total, these external audits for the cost and repair of its public housing\n addressed whether housing agencies are inventory before a full assessment could be\n correctly calculating subsidy amounts, performed. HUD allowed States to\n correctly determining family income, reprogram $380 million from existing\n complying with housing quality standards, community planning and development\n fully using authorized vouchers, and funds for the disaster areas. To expedite the\n implementing controls to prevent process, HUD issued numerous waivers to\n duplicative and fraudulent housing streamline its grant programs including\n assistance payments. OIG\xe2\x80\x99s audits the HOME Investment Partnerships,\n identified questioned costs of more than $16 Emergency Shelter Grants, and CDBG\n million and reported more than $112 million programs.\n that could be put to better use.\n\n\n 1\n Loss estimates for both the single-family and multifamily programs were being finalized at the\n time of this report and are to be included in FHA\xe2\x80\x99s audited FY 2006 financial statements.\n\n\n6 HUD\xe2\x80\x99s Management and Performance Challenges\n\x0c HUD\xe2\x80\x99s response to Hurricanes Katrina one-time grants to assist homeowners, who\nand Rita falls into three separate categories: are not obligated to repair or rebuild their\n(1) use of existing appropriations on the homes but may choose to use the grant in\nground just before hurricane impact, (2) new any legal way to work through their\nappropriations for hurricane relief, and (3) personal recovery situations. OIG has\nFederal Emergency Management Agency concerns about how a \xe2\x80\x9ccompensation\xe2\x80\x9d plan\nfunds administered by HUD in support of that basically reimburses homeowners\xe2\x80\x99\nmission-critical assignments. HUD is losses will spur the rebuilding of now\nadministering the Katrina Disaster Housing blighted communities.\nAssistance and Disaster Voucher Programs,\nwhich were funded at levels of $79 million There are also continuing problems with\nand $390 million, respectively. In addition, the execution of data matching among\nCongress appropriated $16.7 billion in federal agencies. It took months for OIG to\nemergency CDBG funds in two emergency finalize a protocol with the Federal\nsupplemental appropriations. Of this total, Emergency Management Agency to use its\n$10.4 billion and $5.5 billion have been data for matching purposes to detect\nallocated to the States of Louisiana and potentially fraudulent payments. The\nMississippi, respectively. The remaining problems that OIG has encountered would\nfunds were allocated to the States of be greatly mitigated if the Privacy Act\nAlabama, Florida, and Texas. included an exception for postdisaster data\n matching or if alternative legislation\n Each state was required to submit a plan required federal agencies to engage in data\nto HUD outlining how the state intended to matching as a routine procedure in their\nspend its supplemental disaster funding. provision of disaster assistance.\nHowever, the subsequent waivers of CDBG\nprogram requirements, while granted by See chapter 6 of this Semiannual Report\nHUD in accordance with the provisions of for further information on the challenges\nthe supplemental appropriations to facilitate HUD faces in responding to these disasters,\nthe ease and expediency of funding, may along with HUD OIG\xe2\x80\x99s efforts to prevent and\nhave created vulnerabilities. For example, detect fraud and provide audit coverage for\nMississippi and Louisiana opted to use the billions of dollars HUD is administering\nportions of their overall CDBG funding for to aid in the recovery.\n\n\n\n\nHUD\xe2\x80\x99s Management and Performance Challenges 7\n\x0c\x0c Chapter 2\nHUD\xe2\x80\x99\nHUD\xe2\x80\x99ss Single-F\n Sing amil\n amilyy\n le-Famil\n Housin\n Housingg Pr\n Proog rams\n\x0c The Federal Housing Administration\xe2\x80\x99s Mutual Mortgage Insurance Fund single-\n (FHA) single-family programs provide family claims to determine whether HUD\n mortgage insurance to mortgage lenders ensured that paid claims were reviewed to\n that, in turn, provide financing to enable determine whether the mortgage loans met\n individuals and families to purchase, program requirements.\n rehabilitate, and construct a home.\n Of the 175 claims reviewed, 44 were paid\n Audits for mortgages that did not meet program\n requirements. Final HUD costs for claims that\n did not meet program requirements are\n During this reporting period, the Office\n estimated to be $356 million during the period\n of Inspector General (OIG) issued 12\n October 1, 2003, through June 3, 2005.\n external and 5 internal audit reports in the\n single-family housing program area. These\n OIG recommended that HUD (1)\n reports disclosed more than $2.4 million in\n establish procedures to review paid claims\n questioned costs and more than $216\n associated with early defaulted loans and\n million in recommendations that funds be\n unsupported final costs and independently\n put to better use.\n verify that loans met program requirements,\n (2) seek recovery or adequate support for final\n FHA Mutual Mor tg\n tgaage\n Mortg HUD costs for the 44 unsupported claims\n Insurance Fund Claim identified, and (3) assess costs and benefits\n associated with reviewing claims on early\n Payments\n Payments defaulted loans received since October 1, 2003,\n and if feasible, independently determine that\n The U.S. Department of Housing and loans comply with program requirements and\n Urban Development (HUD) OIG reviewed seek recovery or adequate support for final\n HUD\xe2\x80\x99s controls over the payment of FHA HUD costs associated with those claims.\n (Audit Report: 2006-SE-0001)\n\n A Look Bac\n Backk ffor\n or the Year\n Year\n Chartt 2.1: Per\n Char centa\n Percenta ge of OIG Sin\n centag gle-F\n Sing amil\n amilyy Closed Audit Cases\n le-Famil Cases,, Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 3%\n Chicago\n Region 7-8\n 17% Region 2\n Kansas City\n 21% New York\n 11%\n\n\n\n\n Region 3\n Philadelphia\n 14%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 14% Atlanta\n Region 6 6%\n Fort Worth\n 14%\n\n\n\n10 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0cLate Lender Submissions ffor\n or HUD\xe2\x80\x99\n HUD\xe2\x80\x99ss Housin\n Housingg Counseling\n Counseling\nInsurance Endor sement\n Endorsement Assistance Pr\n Proogram\n On May 17, 2005, HUD issued HUD OIG audited HUD\xe2\x80\x99s Housing\nMortgagee Letter 2005-23, removing the 6- Counseling Assistance Program,\nmonth payment history requirement for Washington, DC, to determine whether\nloans submitted late for endorsement. HUD HUD (1) ensured the accuracy and reliability\nOIG analyzed the impact of the policy of the data reported on fiscal year activity\nchanges and reviewed the decision process reports, (2) had a system in place to measure\nfollowed by HUD in approving the rule the impact that the grants have on program\nchange to determine whether changed late performance measurements, and (3) had a\nsubmission for endorsement rules were monitoring system that adequately\nadequately supported and the decision accounted for and safeguarded funds that\nprocess was documented as required by the HUD provides grantees.\nOffice of Management and Budget (OMB),\nthe Government Accountability Office The data reported on the activity reports\n(GAO), and HUD/FHA internal policy and were inaccurate and not current,\npractice. performance goals did not measure the\n effects of grant funds on program objectives,\n Although HUD asserted that the change and some departmental program objectives\ndid not materially increase FHA\xe2\x80\x99s mortgage were not measured. In addition, HUD\xe2\x80\x99s\ninsurance risk, it did not perform a risk oversight and monitoring of local counseling\nanalysis to support this determination. A agencies was not adequate to ensure that the\nreview of the performance of loans from agencies were conducting activities in\nseven prior OIG late endorsement audits accordance with HUD requirements and\nfound a three and one-half times higher risk grant agreements.\nof claims when loans had unacceptable\npayment histories within the prior 6 months. OIG recommended that HUD (1)\nFurther, since the issuance of the mortgagee establish controls to ensure accurate and\nletter, the default rate for loans submitted reliable fiscal year activity reports, (2)\nlate has increased and is significantly higher implement procedures for reporting that\nthan the default rate for loans submitted in provide for more timely information and the\na timely manner. reporting of actual results in later reports\n when estimates are used, (3) implement a\n OIG recommended that HUD (1) system that measures all program objectives\nrescind Mortgagee Letter 2005-23 until and goals, and (4) establish and implement\nappropriate rule changes can be designed written procedures to ensure adequate\nthat are supported by an adequate risk oversight and monitoring of the program.\nassessment considering newly endorsable (Audit Report: 2006-NY-0001)\nloans and (2) establish sufficient\ndocumentation practices to document Cr edit W\n Credit atc\n Watch Ter\n atch minated\n Terminated\nassertions and identify support data\nreferenced in published documents such as Lender\n Lenderss\npolicies and directives. Documentation\nshould be sufficient to permit a competent HUD OIG audited HUD\xe2\x80\x99s Office of\nand independent management review and Housing, Washington, DC, to determine\ncreate an audit trail. (Audit Report: 2006- whether its controls adequately stop Credit\nSE-0002) Watch terminated lenders from originating\n new loans in the area in which they were\n terminated.\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 11\n\x0c HUD\xe2\x80\x99s controls usually stop lenders technical and included errors and\n from originating new loans in areas in which documentation omissions clearly contrary to\n their approval has been terminated. In a prudent lending practices. Further, National\n recent 3-year period, lenders originated 58 City incorrectly certified to the integrity of\n insured loans contrary to their sanctions. the data supporting the underwriting\n During the same period, HUD insured more deficiencies and to the due diligence used\n than 3.3 million loans. in underwriting the loans. HUD paid more\n than $94,000 in claims for two loans and\n OIG recommended that HUD incurred a loss of nearly $48,000 for another\n periodically search for loans that have been two loans.\n originated by terminated lenders and take\n appropriate action against the lenders that OIG recommended that HUD require\n improperly originated the 58 loans National City to indemnify HUD for any\n identified. (Audit Report: 2006-KC-0002) future losses on nine loans with a total\n mortgage value of more than $1 million;\n Mor\n Mortgtg\n tgaagees\n ees,, Loan reimburse HUD more than $94,000 for the\n claims paid on two loans once the associated\n Cor\n Corrrespondents\n espondents,, and Dir ect\n Direct properties are sold; reimburse HUD nearly\n Endor sement Lender $48,000 for the loss incurred on two loans\n Endorsement Lenderss since the properties were already sold; buy\n down two active loans by $2,900; improve\n Audits of single-family lenders and loan its existing procedures and controls to\n origination abuses continued to be a priority ensure its underwriters follow HUD\xe2\x80\x99s\n during this semiannual period. Lenders are underwriting requirements; implement its\n targeted for audit through the use of data quality control plan for reviewing loans with\n mining techniques, along with prioritizing early payment defaults; and ensure that\n audit requests from outside sources. During quality control reviews under its quality\n this period, HUD OIG reviewed 12 FHA control plan are timely, accurate, and\n single-family mortgage lenders. While properly documented. (Audit Report: 2006-\n OIG\xe2\x80\x99s objectives varied by auditee, the CH-1014)\n majority of the reviews were to determine \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n whether the mortgage lender complied with\n HUD\xe2\x80\x99s regulations, procedures, and HUD OIG audited Premier Mortgage\n instructions for the underwriting of FHA Funding, Inc., a nonsupervised loan\n loans and to determine whether the correspondent, because its default rate was\n mortgage lender\xe2\x80\x99s quality assurance plan 378 percent of the average of all lenders in\n met HUD\xe2\x80\x99s requirements. The following the San Antonio, TX, HUD jurisdiction.\n section illustrates the audits conducted in Premier\xe2\x80\x99s Austin, TX, branch originated 36\n the single-family mortgage lender area. of 41 loans that defaulted within the first\n year of origination. Premier and its sponsor,\n HUD OIG audited National City JPMorgan Chase Bank NA, did not meet\n Mortgage Company of Miamisburg, OH, a HUD underwriting or quality control\n nonsupervised lender approved to originate, requirements. HUD insured 11 loans\n underwrite, and submit insurance totaling more than $1 million that the\n endorsement requests under HUD\xe2\x80\x99s single- sponsor approved with inaccurate credit\n family direct endorsement program. Of the information. Further, Premier and its\n 41 loans reviewed, National City approved sponsors charged borrowers $163 in\n 20 that did not fully meet HUD\xe2\x80\x99s ineligible closing costs and approved 31\n requirements. The loans defaulted early loans with appraisals that did not meet HUD\n and/or went to claim. The underwriting requirements. These deficiencies increased\n deficiencies were material as well as\n\n12 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0cthe FHA insurance fund\xe2\x80\x99s risk of loss. As of $80,000 on two loans that went into default,\nApril 28, 2006, HUD had lost more than causing HUD to pay a claim, and require\n$394,000 on these loans. Trident to develop internal procedures to\n more closely monitor its underwriting\n OIG recommended that HUD (1) procedures, reimburse borrowers $146 in\nrequire JPMorgan Chase to reimburse HUD overcharges, and revise and implement its\nmore than $394,000 for losses incurred on quality control plan to comply with HUD\nsix loans, indemnify HUD for six loans requirements. (Audit Report: 2006-PH-\ntotaling more than $647,000, and buy down 1012)\nloans or repay HUD for other deficiencies; \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n(2) require Premier and JPMorgan Chase to\ntake action to correct quality control HUD OIG audited First Residential\ndeficiencies and ensure that appraisals meet Mortgage Corporation, a nonsupervised\nHUD requirements; and (3) take appropriate direct endorsement lender located in\nadministrative sanctions against Premier Englewood Cliffs, NJ. Seven of eleven loans\nand JPMorgan Chase for entering incorrect reviewed exhibited significant underwriting\ndata into the automated underwriting deficiencies such as inadequate credit\nsystem and certifying their integrity. (Audit analysis, inadequate verification of funds to\nReport: 2006-FW-1011) close, minimum cash investment not met,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b and inadequate verification of income and/\n or employment. The remaining four loans\n HUD OIG audited the Devon, PA, contained technical violations. In addition,\nbranch of Trident Mortgage Company, a one borrower was charged a $495 ineligible\nnonsupervised direct endorsement lender commitment fee.\napproved to originate FHA single-family\nmortgage loans, because its default rate was OIG recommended that HUD require\nabove the state\xe2\x80\x99s default rate. Of the 26 loans First Residential to indemnify it for potential\nreviewed, the Devon office did not fully losses and/or claims on loans with\ncomply with FHA requirements for 15 of the significant underwriting deficiencies,\nloans valued at just under $2 million. reimburse one borrower for an ineligible\nTrident did not exercise due diligence in the charge, and implement a quality control\nreview of assets and liabilities, properly process in accordance with HUD\nverify income, ensure that all borrowers met requirements. (Audit Report: 2006-NY-\nthe minimum required 3 percent investment 1009)\nin the property, properly document the \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nqualifying ratios, and verify rental history.\nIn addition, Trident overcharged for credit HUD OIG audited First Suffolk\nreports. For five of the cases reviewed, fees Mortgage Corporation, North Babylon, NY,\ntotaling $146 were charged to the borrowers. a nonsupervised direct endorsement lender.\nFurther, Trident did not perform the Three of eight loans reviewed exhibited\nrequired number of quality control reviews significant underwriting deficiencies, and\nof its FHA loans and did not ensure that all the remaining five loans contained technical\nFHA loans that went into early default were violations. As a result, the FHA insurance\nflagged for review. fund paid claims associated with two loans\n and continues to assume a risk with another\n OIG recommended that HUD request loan. In addition, First Suffolk did not\nfrom Trident an indemnification of more always comply with HUD\xe2\x80\x99s and its own\nthan $487,000 on 13 loans, which it issued quality control requirements to (1) ensure\ncontrary to HUD\xe2\x80\x99s loan origination that all HUD-insured loans that went into\nprocedures, an indemnification of almost default within the first six payments were\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 13\n\x0c reviewed and (2) document that corrective generally complied with HUD\xe2\x80\x99s\n action was taken on all material findings requirements for underwriting FHA loans.\n identified in quality control reviews. However, it approved 3 of 29 FHA loans\n reviewed that did not fully meet HUD\xe2\x80\x99s\n OIG recommended that HUD require requirements. Further, Community Central\n First Suffolk to (1) reimburse HUD for the incorrectly certified to the due diligence\n amount of claims and associated fees paid used in underwriting the three loans. Its\n on two loans with significant underwriting quality control plan did not comply with\n deficiencies, (2) indemnify HUD against HUD\xe2\x80\x99s requirements, and quality control\n future losses on the one currently insured reviews were not performed in a timely\n loan with significant underwriting manner. For the loans in question, the risk\n deficiencies, (3) establish procedures to to the FHA fund was increased.\n ensure that HUD\xe2\x80\x99s underwriting\n requirements are properly implemented OIG recommended that HUD require\n and documented, and (4) implement Community Central to indemnify it for any\n procedures to ensure compliance with future losses on two loans with a total\n HUD\xe2\x80\x99s and its own quality control mortgage value of more than $140,000,\n requirements. (Audit Report: 2006-NY- reimburse it for any future net loss once the\n 1007) associated property is sold, and ensure that\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b quality control reviews are timely and\n properly documented. OIG also\n HUD OIG audited First Magnus recommended that HUD determine legal\n Financial Corporation\xe2\x80\x99s loan origination and sufficiency and if legally sufficient, pursue\n business practices at the First Magnus remedies under the Program Fraud Civil\n corporate office in Tucson, AZ. First Remedies Act (PFCRA) against Community\n Magnus did not follow HUD requirements Central and/or its principals for the three\n when underwriting six FHA-insured loans. incorrect certifications identified. (Audit\n As a result, the lender approved borrowers Report: 2006-CH-1017)\n for FHA-insured loans for which they may \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n not be able to make the monthly mortgage HUD OIG reviewed 13 FHA loans\n payments. underwritten by Nexgen Lending, Inc.\xe2\x80\x99s\n Lakewood, CO, branch office. Nexgen did\n OIG recommended that HUD require not follow HUD requirements in\n First Magnus to indemnify it more than underwriting two of the loans. As a result,\n $95,000 for estimated losses on three loans Nexgen placed HUD\xe2\x80\x99s insurance fund at risk\n processed and originated in disregard of for as much as $207,000 and overinsured one\n HUD rules and regulations and pay civil mortgage for more than $1,000. Nexgen\xe2\x80\x99s\n money penalties for four loans that were quality control plan met HUD\xe2\x80\x99s\n originated and processed using an incorrect requirements. OIG recommended that HUD\n branch lender identification number. (Audit require Nexgen to indemnify it for the po-\n Report: 2006-LA-1018) tential loss on the one loan with a\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b significant deficiency and reimburse the\n appropriate parties for the overinsured\n HUD OIG audited Community Central mortgage. (Audit Report: 2006-DE-1006)\n Bank, Mt. Clemens, MI, a supervised lender \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n approved to originate, underwrite, and\n submit insurance endorsement requests HUD OIG audited KB Home Mortgage\n under HUD\xe2\x80\x99s single-family direct Company in Los Angeles, CA, after a prior\n endorsement program, because of its high OIG audit found indications that KB\n default to claim rate. Community Central underwriters inaccurately certified that they\n\n\n14 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0cunderwrote certain FHA loans. For 206 of\nthe 543 loans reviewed, KB\xe2\x80\x99s underwriters\ninaccurately certified that they personally\nunderwrote the loans. As a result, HUD has\nno assurance that these loans were properly\nunderwritten to ensure that they were\neligible for FHA mortgage insurance.\n\n OIG recommended that HUD require\nKB to ensure that underwriter certifications\nfor HUD-insured loans are only executed by\ndirect endorsement underwriters after\npersonally reviewing the appraisal, credit\napplication, and all associated documents\nand using due diligence in underwriting the\nmortgage. (Audit Report: 2006-LA-1014)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 15\n\x0c Investi\n Inv gations\n estig state, and local law enforcement agencies.\n The results of various significant\n investigations are described below.\n During this reporting period, OIG\n opened 77 investigation cases and closed 161\n cases in the single-family housing program Loan Origination Fraud\n Origination\n area. Judicial action taken on these cases\n during the period included $62,779,855 in Donald W. Gupton, Inc., doing business\n investigative recoveries, $23,645,106 in as Dynasty Homes of Henderson, Superior\n funds put to better use, 111 indictments/ Housing Center, Creative Real Estate, Manu-\n informations, 144 convictions/pleas/pretrial facturing Housing Sales Center, M&G Prop-\n diversions, 71 administrative actions, 9 civil erties II, Inc., and CRE Properties, LLC, (The\n actions, 3 personnel actions, and 98 arrests. Companies) pled guilty in U.S. District\n Court, New Bern, NC, to one count each of\n Char\n Chartt 2.2: Single-F\n Sing amil\n amilyy Reco\n le-Famil veries\n Recov conspiracy and money laundering. Donald\n Contract Fraud False\n Scott Carroll and Richard Meador, both sales\n 1% ($800,000) Statements managers for Gupton, were sentenced in\n Other 2% ($1,539,149)\n 1% ($544,434)\n U.S. District Court, Raleigh, NC, for their\n Officer/Teacher\n Next Door recent convictions on false statements; bank\n 1% ($339,393)\n fraud; and/or conspiracy to commit mail\n Loan\n fraud, wire fraud, or money laundering.\n Origination Carroll was sentenced to 30 months\n 25%\n ($15,420,199) incarceration and 3 years supervised release\n Flipping\n 70% ($44,136,680)\n and ordered to pay HUD $1,308,029 and 20\n Total Recoveries $62,779,855\n victims $168,802 restitution; Meador was\n sentenced to 53 months incarceration and 3\n Some investigations discussed in this years supervised release and ordered to pay\n report were conducted jointly with federal, HUD $1,101,498 and 20 victims $168,802\n\n A Look Bac\n Back k ffor\n or the Year\n Year\n Char\n Chartt 2.3: Percenta\n Percenta ge of OIG Sin\n centag gle-F\n Sing amil\n amilyy Closed In\n le-Famil vesti\n Inv gation Cases\n estig Cases,, Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 2%\n Chicago\n Region 7-8\n 7% Region 2\n Kansas City\n 8% New York\n 16%\n\n\n\n\n Region 3\n Philadelphia\n 15%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 20% Atlanta\n Region 6 8%\n Fort Worth\n 23%\n\n\n\n16 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0crestitution, jointly and severally with obtaining FHA-insured mortgages. As a\nCarroll. Between 1999 and 2002, The result, 15 FHA-insured properties defaulted,\nCompanies bought and sold more than 150 95 properties are at risk, and HUD realized\nmanufactured and mobile homes, some losses of $2,356,841.\nincluding land, and assisted unqualified \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nborrowers in obtaining FHA-insured\nmortgages valued at more than $11 million Benedicta Gomez, an accountant and\nby using fictitious trade-ins, providing cash owner of One Service, Inc., Aurora, CO, pled\nand fabricated gift letters, and falsely guilty in U.S. District Court, Denver, CO,\ninflating values and/or certifying land to one count of wire fraud. William Mendez,\nownership. A preliminary order of owner of William E. Mendez Team, Inc., at\nforfeiture commands The Companies to REMAX 100; former Mendez Team realtor\nforfeit proceeds of up to $11 million, assets Rogasiano Caldera; and unlicensed realtor\nassociated with each organization, a Piper and former Mendez Team assistant Claudia\nairplane, and more than 300 acres of land. Mendez were sentenced for their earlier\nAs a result of foreclosures, HUD realized guilty pleas to numerous charges. William\nlosses estimated at $6.8 million. Mendez was sentenced to 49 months in\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b prison and 36 months probation and ordered\n to pay HUD $1,227,082 restitution; Caldera\n David B. Finzi, a real estate investor, was was sentenced to 15 months in prison and\nsentenced in U.S. District Court, Los 36 months probation, ordered to pay HUD\nAngeles, CA, to 5 years probation and $80,729 restitution, and debarred from\nordered to pay HUD $2,389,133 restitution procurement and nonprocurement\nfor his earlier conviction on wire fraud and transactions as either a principal or\naiding and abetting. Finzi and others located participant with HUD and throughout the\nand purchased multiunit residential Executive Branch of the Federal\nproperties, flipped the properties at inflated Government for 10 months; Claudia Mendez\nvalues to fictitious purchasers while Finzi\xe2\x80\x99s was sentenced to 8 months incarceration and\npurchase transactions were pending, 36 months probation and ordered to pay\nprepared and submitted fraudulent loan HUD $109,167 restitution. Gomez, Caldera,\napplications for bogus purchasers, and and William and Claudia Mendez assisted\nobtained $12.5 million in FHA-insured unqualified and undocumented immigrants\nmortgage loans. As a result of foreclosures, in obtaining more than 300 FHA-insured\nHUD realized losses of $3,161,942. loans valued in excess of $61 million. As a\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b result of foreclosures, HUD realized losses\n of $2.3 million.\n Cenobio Rojas and his wife, Ruth Rojas, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nowners of Continental Termite and\nInvestments, were sentenced in U.S. District Real estate investors Douglas Hastings\nCourt, Los Angeles, CA, for their previous and Phil Miskimon, along with Julie Smith,\nguilty pleas to money laundering. Cenobio Shawn Fleming, and Jeffrey Meyer, each pled\nRojas was sentenced to 37 months guilty in U.S. District Court, Rockford, IL, to\nincarceration and ordered to pay HUD numerous counts of conspiracy, false\n$1,518,353 restitution; Ruth Rojas was statements to HUD, and false statements. Dale\nsentenced to 21 months incarceration and 36 Nelson, Chad Nicks, and Tasha Barnes, also\nmonths probation and ordered to pay the known as Tasha Thompson, were\nabove restitution jointly and severally with sentenced for their earlier guilty pleas to\nher husband. Cenobio and Ruth Rojas conspiracy and false statements to HUD.\nprovided downpayment funds, used false Nelson was sentenced to 5 months\nloan documents, and inflated the values of incarceration, 5 months home confinement,\nproperties sold to unqualified buyers and 24 months probation and ordered to pay\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 17\n\x0c acquired false credit letters, verifications of em-\n ployment, or gift letters and/or acted as straw\n buyers to assist unqualified applicants in ob-\n taining more than 50 FHA-insured\n mortgages. As a result, 35 FHA-insured\n properties defaulted, and HUD losses exceed\n $2 million.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Rhonda Torossian, a loan officer at RBC\n Mortgage Company; Nancy Rodriguez, a loan\n processor at RBC; Cesar Arenas, a realtor at\n Whitehead Realty; and Raul Raygoza and\n Israel Qunitero, both employees at Friends\n Furniture, were indicted in U.S. District Court,\n Rockford, IL, on numerous counts of false\n statements to HUD, mail fraud, and\n conspiracy. The above defendants allegedly\n provided false documents, including\n verifications of employment, credit letters,\n cashier\xe2\x80\x99s checks, Social Security cards and\n numbers, and correspondence, to unqualified\n buyers obtaining FHA-insured mortgages. As\n a result, more than 50 FHA-insured loans were\n identified, and HUD losses exceed $2 million.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Columbia National Mortgage, Inc.\n (CNM), a subsidiary of American Home\n Mortgage Investment Corporation,\n Philadelphia, PA, entered into a settlement\n agreement with the U. S. Government and\n plaintiff/realtor Cynthia Santore-Smith, a\n former CNM employee. As a condition of\n the settlement agreement, CNM agreed to\n pay the U. S. Government $800,000 and\n Copyright, 2006. The Rockford Register indemnify two FHA-insured loans on\n Star - Rockford, IL. First two residential properties in Philadelphia, PA. In\n paragraphs of article. Reprinted with\n 2003, Santore-Smith filed a Qui Tam\n permission.\n complaint and provided information\n relating to fraudulent FHA-insured loans\n HUD $286,241 restitution; Nicks was packaged and processed by employees of\n sentenced to 5 months incarceration, 5 months CNM\xe2\x80\x99s Bensalem, PA, branch office during\n home confinement, and 36 months probation 1997, 1998, and 1999.\n and ordered to pay HUD $257,372 restitution; \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Barnes was sentenced to 4 months\n incarceration, 4 months home confinement, Edward Carrillo, owner of Sahara\n and 12 months probation and ordered to pay Investments in Scottsdale, AZ, was\n HUD $183,715 restitution. Hastings, sentenced in Maricopa County Superior\n Miskimon, Smith, Fleming, Meyer, Nelson, Court, Phoenix, AZ, to 5 years in prison and\n Nicks, Barnes, and others provided or 7 years probation and ordered to pay\n\n18 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0cnumerous victims $1,097,432 restitution for perform 100 hours of community service;\naccepting investor funds and failing to Morrero was sentenced to 36 months\nacquire properties or return investor probation and ordered to pay the State of\nmonies. Carrillo was further charged in an New Jersey $20,000. Fauntleroy, Bowie,\ninformation filed in U.S. District Court, Mason, and Morrero assisted unqualified\nPhoenix, AZ, with one count of mail fraud. borrowers in obtaining FHA-insured\nCarrillo allegedly purchased FHA-insured mortgages by submitting false loan\nproperties through HUD\xe2\x80\x99s \xe2\x80\x9cpreforeclosure\xe2\x80\x9d documentation and appraisals. In addition,\nprogram at substantial discounts and using the above defendants purchased properties\nfraudulent appraisals, then resold the using borrower funds, failed to complete\nproperties the same day at market value to promised renovations, and overcharged\npurchasers obtaining conventional borrowers through excessive origination\nmortgages. As a result, 65 FHA-insured fees. As a result, 33 FHA-insured\nproperties defaulted, and HUD realized properties defaulted, and HUD losses\nlosses in excess of $1.8 million. exceed $1.2 million.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Andrew Bogdan, a former real estate Ricardo Medina, a former realtor at\nspeculator, was sentenced in U.S. District REMAX 100, Lakewood, CO, and Perla\nCourt, Baltimore, MD, to 5 years probation Alvarado, a former loan officer at Creative\nand ordered to pay Community Law Mortgage in Englewood, CO, were\nCenter $277,650 restitution for his earlier sentenced in First Judicial District Court,\nguilty plea to conspiracy. Bogdan and Golden, CO, for their earlier guilty pleas to\nothers purchased and resold properties at theft. Medina was sentenced to 48 months\ninflated values and assisted unqualified confinement, 48 months probation, and 300\nbuyers in obtaining FHA-insured mortgages hours of community service and fined\nby submitting false employment, financial, $5,000; Alvarado was sentenced to 36\nand gift letter documentation. As a result, months probation and 96 hours of\n64 FHA-insured properties defaulted, and community service and ordered to pay HUD\nHUD realized losses of $1.6 million. $52,223 restitution. Medina, Alvarado, and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b others assisted unqualified and\n undocumented immigrant homebuyers in\n Barry C. Fauntleroy, President of EON obtaining FHA-insured mortgages on\nCorporation; Devon Bowie, President of numerous properties. As a result, 67 FHA-\nNeighborhood Mortgage Bankers; Sean insured properties defaulted, and HUD\nMason, a closing attorney for EON; and losses approximate $1 million. In addition,\nStacey Morrero, an underwriter at Medina, Alvarado, and previously indicted\nNeighborhood Mortgage Bankers, were Nancy Rios, a former loan officer at\nsentenced in U.S. District Court, Newark, Colorado Bank and Trust, Denver, CO, were\nNJ, for their earlier guilty pleas. Fauntleroy suspended from participation in\nwas sentenced to 12 months incarceration procurement and nonprocurement\nand 4 years probation, fined $1,000, and transactions as either participants or\nordered to perform 40 hours of community principals with HUD and throughout the\nservice; Bowie was sentenced to 9 months Executive Branch of the Federal\nincarceration, 3 years probation, and 100 Government. The suspensions were based\nhours of community service; ordered to pay on an indictment filed in Jefferson County\nNew Jersey State Division of Consumer District Court, Denver, CO, charging\nAffairs $300,000 restitution; and fined Medina, Alvarado, and Rios with 49\n$1,500; Mason was sentenced to 3 years predicate acts in violation of the Colorado\nprobation, fined $3,500, and ordered to Organized Crime Control Act.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 19\n\x0c David Calderon, owner of Atlas Home\n Loans (AHL), a HUD direct endorsement\n lender; his wife Baneza Calderon, AHL\n office manager; and his brother Carlos\n Calderon, a loan officer at AHL, each pled\n guilty in U.S. District Court, Los Angeles,\n CA, to false statements and/or misprision\n of a felony. David, Baneza, and Carlos\n Calderon created fraudulent documents for\n unqualified or ghost buyers obtaining\n FHA-insured mortgages. As a result,\n approximately 91 FHA-insured properties\n defaulted, and HUD realized losses of about\n $910,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Lawrence Lynch, a real estate investor\n and partner in Tiffy Corporation, pled guilty\n in U.S. District Court, Springfield, MA, to\n mail fraud, money laundering, and\n forfeiture. Mark McCarthy, a loan\n originator and mortgage broker doing\n business as RCML INC., pled guilty to wire\n fraud, money laundering, and forfeiture.\n Joseph Sullivan, owner of Sullivan\n Appraisals; James Smith, former owner of\n Springfield Mortgage; mortgage broker\n Theodore C. Jarrett, Jr.; real estate investors\n Pasquale Romeo and Anthony Matos; and\n Michael Bergdoll, owner of Bergdoll Home\n Improvement, each pled guilty to wire fraud\n and money laundering. Kathryn Zepka, a\n mortgage broker, pled guilty to wire fraud\n and false statements. In addition, Albert V.\n Innarelli, a former real estate closing\n attorney; Jonathan Frederick, an appraiser\n doing business as Westside Appraisal; and Copyright, 2006. The Republican - Springfield, MA.\n real estate brokers Paul Starnes and Marc Reprinted with permission.\n Brown were sentenced for their earlier guilty\n pleas. Innarelli was sentenced to 6 years\n imprisonment and 5 years probation and years probation and ordered to pay two\n ordered to pay two financial institutions and banks $137,685 restitution for his earlier\n seven victims $1,293,858 restitution for his guilty plea to wire fraud and conspiracy to\n earlier guilty plea to wire fraud; Frederick commit money laundering; Brown was\n was sentenced to 18 months confinement sentenced to 1 day incarceration, 12 months\n and 4 years probation and ordered to pay confinement at a community corrections\n seven victims $35,000 restitution for his center, 12 months house arrest with\n previous guilty plea to wire fraud and electronic monitoring, 400 hours of\n conspiracy to launder money. Starnes was community service, and 5 years supervised\n sentenced to 36 months incarceration and 5 release and ordered to pay Bank of America\n\n\n20 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0cand National City Mortgage $137,685 flipped the properties at inflated values, and\nrestitution for his earlier plea to wire fraud recruited or assisted unqualified buyers in\nand money laundering. The above obtaining FHA-insured mortgages by\ndefendants purchased and flipped more submitting false employment, income, and\nthan 70 HUD real estate owned (REO) financial documentation. As a result, 16\nproperties and obtained more than $5.9 FHA-insured properties defaulted, and\nmillion in FHA-insured mortgages for HUD realized losses of $537,701.\nunqualified buyers by processing fraudu- \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nlent loans containing false information and\ndocumentation. As a result, 31 FHA-insured Harold Meza, a real estate agent and\nproperties defaulted, and HUD realized investor who operated JLF Properties,\nlosses of $834,795. California Discount Realty, North Wind\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Realty, and Casa Blanca Realty in San\n Bernardino County, CA, and Karla Preciado,\n Gilbert Lugo and Tracey Silvis Rangell, also known as Karla Venegas, an unlicensed\nformer owners of Benefit Escrow in Downey, real estate agent and Meza\xe2\x80\x99s assistant, were\nCA, pled guilty in U.S. District Court, Los each indicted in U.S District Court, Los\nAngeles, CA, to an information charging Angeles, CA, on one count of conspiracy\nthem with conspiracy, false statements, and and six counts each of false statements and\naiding and abetting. Lugo, Rangell, and aiding and abetting. Meza, Preciado, and\nothers assisted unqualified buyers in others allegedly obtained or produced false\nobtaining FHA-insured mortgages by identification documents, employment\nproviding downpayments and submitting verifications, gift letters, or other records for\nfalse statements. As a result, 30 FHA- unqualified buyers acquiring FHA-insured\ninsured properties defaulted, and HUD mortgage loans. As a result, 40 FHA-\nlosses exceed $700,000. insured properties defaulted, and HUD\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b losses exceed $500,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Naomi LaBrie, formerly doing business\nas Rehablers, Inc., pled guilty in U.S. Jocelyn Sicat and Andy Pena, former\nDistrict Court, Kansas City, KS, to false owners of Crossmark Mortgage, were\nstatements to HUD. LaBrie provided sentenced in U.S. District Court, Los\nclosing funds for FHA-insured homebuyers, Angeles, CA, for their earlier guilty pleas to\ninstructed the homebuyers to falsify gift wire fraud. Sicat and Pena were each\nletters, and certified on settlement sentenced to 6 months home detention, 3\nstatements that she did not provide funds years supervised release, and 600 hours of\nfor loan closings. As a result, 20 FHA- community service and ordered to pay HUD\ninsured properties defaulted, and HUD $367,929 restitution, which they paid on or\nlosses exceed $600,000. before sentencing. Sicat and Pena conspired\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and created false documents to assist\n unqualified buyers in obtaining FHA-\n Brian Lyles, a real estate investor, and insured mortgages. As a result, 12 FHA-\nShena Fraser, a loan officer at A&E, insured properties defaulted, and HUD\nIndependent, and Germaine Mortgage realized losses estimated at $474,264.\nCompanies, were each sentenced in U.S \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nDistrict Court, Newark, NJ, to 3 years\nprobation and ordered to pay HUD $537,701\n Kenneth DiPrenda, a former AMS\nrestitution, jointly and severally, for their\n Mortgage loan officer; Mario Mendoza, a\nearlier guilty pleas to conspiracy to commit\n former realtor for Weichart Realty; Linda\nmail fraud and false statements. Lyles and\n Serrano, a real estate closing attorney; and\nFraser purchased residential properties,\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 21\n\x0c Myriam Vaca, an employee of formerly District Court, Atlanta, GA, to conspiracy\n indicted realtor Mario Mendoza, were each and wire fraud. Calvin D. Dalton, President\n sentenced in U.S. District Court, Newark, of RETI Relocation Services, Inc.; James F.\n NJ, for their earlier guilty pleas to Stovall III, a closing attorney; certified real\n conspiracy to submit false statements to estate appraisers John Bello, David R. Bobo,\n HUD. DiPrenda was sentenced to 2 years and Paul Jaretsky Jr.; mortgage brokers\n probation and ordered to pay HUD $28,858 Martin Rosenthal and George W. McRee Jr.;\n restitution; Mendoza was sentenced to 6 real estate broker Larry Frazier; and straw\n months home confinement and 2 years recruiters/borrowers William Chavis, John\n probation and ordered to pay HUD Hyacinty, Reginald Kemp, Rhonda Kent,\n $100,000; Serrano and Vaca were sentenced Constance Zielins, and Leonard Zielins,\n to 1 and 2 years probation, respectively. In were indicted on numerous counts of money\n addition, John and Caridad Prados were laundering, bank loan fraud, bank fraud,\n arrested after criminal complaints were filed wire fraud, mail fraud, and conspiracy.\n charging them with defrauding HUD for the Demetri Dante Coffee, an FHA-approved\n purpose of executing a Title 11 bankruptcy appraiser, was charged in a superseding\n petition and using a false Social Security indictment with bank fraud, wire fraud,\n number (SSN) to secure FHA-insured loans. mail fraud, and conspiracy. The above\n DiPrenda, Mendoza, Serrano, Vaca, and defendants allegedly created and submitted\n John and Caridad Prados recruited and false documentation to obtain 98 mortgage\n assisted unqualified borrowers in obtaining loans valued at more than $20 million,\n FHA-insured mortgages by submitting including two FHA-insured loans. As a\n fraudulent employment, identity, and other result of foreclosures, HUD losses\n loan documentation. As a result, 12 FHA- approximate $300,000.\n insured properties defaulted, and HUD \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n losses exceed $349,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Michael Grady, Joel Rosario, and\n Robert Zappone, doing business as GRZ\n Lionel Crosby, a taxicab driver, pled LLC, a home connection and mortgage\n guilty in U.S. District Court, Las Vegas, NV, super center, entered into a $750,000 civil\n to one count of fraud against HUD. Lionel settlement with the Connecticut Attorney\n Crosby\xe2\x80\x99s brother, Stefan Crosby, was General\xe2\x80\x99s Office (CAGO) in Superior Court,\n sentenced to 21 months imprisonment and Waterbury CT. In December 2003, CAGO\n 3 years supervised release and ordered to filed a civil lawsuit alleging the above\n pay HUD $302,365 restitution for his earlier defendants performed cosmetic repairs on\n guilty plea to conspiracy and false neglected properties before selling the\n statements to HUD. Lionel and Stefan properties at inflated values to purchasers\n Crosby provided fraudulent employment, who obtained 17 FHA-insured mortgages\n income, identification, and other valued at $1,358,824. As a result, three FHA-\n documentation to unqualified straw buyers insured properties defaulted, and HUD\n obtaining FHA-insured loans. In addition, realized losses approximating $235,000.\n both Lionel and Stefan Crosby personally \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n applied for FHA-insured loans using bogus\n documents. As a result, 12 FHA-insured Real estate investor Sholom Moskowitz\n properties defaulted, and HUD realized and Trena Hill, a former loan officer with\n losses of $302,365. Community Home Mortgage Company,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b were each sentenced in U.S. District Court,\n Newark, NJ, for their earlier guilty pleas to\n Rashid Muhammad, a recruiter for tax evasion, bank fraud, false statements to\n RETI Relocation Services, pled guilty in U.S. a financial institution, and/or conspiracy to\n\n\n22 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0csubmit false statements to a financial Norfolk, VA, to bankruptcy fraud,\ninstitution. Moskowitz was sentenced to 6 aggravated identity theft, and wire fraud.\nmonths home confinement and 5 years Smith fraudulently verified the\nprobation and ordered to pay HUD $201,244 creditworthiness of two borrowers\nrestitution; Hill was sentenced to 5 years obtaining FHA-insured mortgages through\nprobation and ordered to pay HUD $91,556 a bogus company known as 4H Investment\nrestitution. Moskowitz and Hill prepared Mutual, LLC; duped an individual into\nfalse loan applications, appraisals, investing $27,000 for an appraisal and\nemployment verifications, and gift letters to downpayment on a $10 million\nassist unqualified individuals in obtaining multifamily Section 8 apartment complex;\nnine FHA-insured mortgages. As a result, fraudulently used the SSN of another\nfour FHA-insured properties defaulted, and person to obtain a conventional mortgage;\nHUD realized losses of $201,224. and filed eight bankruptcies, five under his\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b name and three under his spouse\xe2\x80\x99s name, to\n forestall foreclosure proceedings against his\n Sean Beard, owner of First Equity personal residence. As a result, both FHA-\nCorporation, and real estate investors insured mortgages defaulted, and HUD\nMorgan Haines and Theodore Antonucci realized losses of $126,900.\nwere each sentenced in U.S. District Court, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nRochester, NY, for their earlier guilty pleas\nto conspiracy to commit mail fraud, Elie Louie-Pierre, a former loan officer\nconspiracy to commit bank fraud, and/or at Saxon Mortgage Bankers (SMB), was\nfalse documents or statements to obtain a sentenced in U.S. District Court, Central\nHUD loan. Beard was sentenced to 16 Islip, NY, to 5 years probation and ordered\nmonths incarceration and 3 years to pay HUD $92,015 restitution for his\nsupervised release and ordered to pay previous guilty plea to fraud against HUD.\nHUD $38,441 and Countrywide Mortgage Carol Horton Branch and Francis Purcell,\n$23,412 restitution; Haines was sentenced to real estate agents with 5-Star Realty and\n6 months home confinement and 5 years Pelican Properties, were convicted in U.S.\nprobation and ordered to pay the above District Court, Mineloa, NY, on one count\nrestitution jointly and severally with Beard; of conspiracy. Branch and Purcell were each\nAntonucci was sentenced to 48 months sentenced to 5 years probation, and Purcell\nincarceration and 5 years probation and was fined $1,000. Louie-Pierre, Branch, and\nordered to pay HUD $156,341 and Purcell produced, obtained, and used\nnumerous banks $775,217 restitution. fraudulent documents to originate at least\nBeard, Haines, Antonucci, and other 75 FHA-insured mortgages during Louie-\nconspirators purchased homes, flipped the Pierre\xe2\x80\x99s employment with SMB. As a result\nproperties to each other at inflated values, of foreclosures, HUD realized losses of\nprovided false documentation to secure $92,015.\nFHA or conventional financing on the \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nproperties, and defaulted on mortgage loans\nin excess of $1 million shortly afterward. As Axel Bonilla, a former loan officer at\na result, two FHA-insured properties Main Street Mortgage and Ark Mortgage,\ndefaulted, and HUD realized losses of was sentenced in U.S. District Court,\n$186,475. Trenton, NJ, to 18 months incarceration and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b 3 years probation and ordered to pay\n numerous victims $1,531,062 and HUD\n Mordecai Smith, the former chief $76,123 restitution for his earlier guilty plea\nfinancial officer of Virginia Beach Public to mail fraud charges. Bonilla and\nSchools, pled guilty in U.S. District Court, previously indicted Laura Barlow, a former\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 23\n\x0c underwriter at Main Street Mortgage broker FHA-insured mortgage loans. As a\n Service and Ark Mortgage, assisted result, two FHA-insured properties\n unqualified borrowers in obtaining FHA- defaulted, and HUD realized losses of\n insured mortgages by providing false $46,299.\n documents. Bonilla also embezzled and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n converted more than $1.5 million in\n investor funds, by creating false documents Willie Bynum pled guilty in U.S. District\n and reporting fictitious investment Court, Norfolk, VA, to one count of\n earnings, and used investor funds to conspiracy to make false statements to HUD.\n purchase residential properties. As a result, Bynum purchased three properties, obtained\n HUD realized losses of $76,123 when six FHA-insured mortgages by falsifying loan\n FHA-insured mortgages defaulted. applications and using or attempting to use\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b straw buyers, rented then sold two\n properties and allowed unqualified\n Farid Bayot and Shaian Birashk, real purchasers to assume his FHA-insured\n estate brokers/owners of Global One Realty loans, and defaulted on the remaining FHA-\n Inc., Aurora, CO, each pled guilty in U.S. insured mortgage. As a result, HUD\n District Court, Denver, CO, to wire fraud realized a loss of $25,000.\n and/or aiding and abetting. Bayot was \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n sentenced to 36 months probation and\n ordered to refrain from employment in the Twelve undocumented immigrants pled\n real estate or mortgage industry. In guilty in Johnson County District Court,\n addition, Mehdi \xe2\x80\x9cTim\xe2\x80\x9d Ghaemi, owner of Kansas City, KS, to various charges of\n Arborz Real Estate Company in Greenwood identify theft and false statements. The\n Village, CO, and Hamidullah Sarwary, a above defendants were each sentenced to 5\n former Littleton Housing Authority (LHA) months incarceration and 18 months\n Section 8 tenant, were arrested after theft, probation and ordered to refinance or sell\n forgery, and/or criminal impersonation their FHA-insured properties to eliminate\n charges were filed in State District Court, about $900,000 in mortgages considered at\n Englewood, CO. Bayot and Birashk assisted risk. The defendants fraudulently obtained\n Sarwary purchase property and obtain an FHA-insured mortgage loans using false\n FHA-insured mortgage. Ghaemi allegedly SSNs through an unidentified loan officer in\n assisted Sarwary in hiding his property Olathe, KS. As a result, 72 FHA-insured\n ownership from LHA, and Sarwary mortgages valued at approximately $5\n allegedly failed to report his ownership of million were identified at risk.\n the property on LHA certifications. As a \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n result, HUD realized losses of $46,988 when\n Sarwary defaulted on his FHA-insured Realtor Rohan A. Johnson, also known\n mortgage, and $3,760 in LHA housing as Ato Ra Ajah El, and real estate consultant\n assistance Sarwary was not entitled to Donovan Gilpin, doing business as Pre\n receive. Amble Properties and professing\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b membership in an antigovernment Moorish\n rights group, were indicted in a superseding\n Ifiok Equere, a loan broker and real indictment filed in U.S. District Court, Central\n estate investor, was sentenced in U.S. Islip, NY, on conspiracy, theft of government\n District Court, St. Louis, MO, to 37 months property, and mail fraud charges. Johnson and\n incarceration and ordered to pay HUD and Gilpin allegedly filed fraudulent real estate\n Wells Fargo Mortgage $104,702 restitution deeds transferring ownership of 14 HUD-\n for his earlier guilty plea to false statements owned or FHA-insured properties, a U.S.\n and felon in possession of a firearm. Equere Department of Veterans Affairs (VA)-\n used false documents to flip properties and guaranteed property, and a bank-owned\n\n24 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0cproperty to Pre Amble Properties. After Kelly Jones, a loan officer and real estate\ntransferring the properties, Johnson and agent at Amortgage Link and Nationwide\nGilpin allegedly resided in two HUD Real Estate Solutions LLC, and Wander\nproperties, sold the bank property to an Colon, an FHA-insured mortgagor, were\nunsuspecting buyer, and attempted to sell the indicted in U.S. District Court, Memphis,\nVA property and two HUD properties to TN, on numerous charges of conspiracy,\nundercover operatives for $550,000. In fraud, false statements, and general\naddition, Johnson allegedly claimed to be a provisions. Jones allegedly submitted false\nHUD official on numerous deed recordings. financial documents to assist unqualified\nAs a result, the bogus deeds prevented HUD borrowers in obtaining FHA-insured\nfrom selling its properties to legitimate buyers mortgages. Colon allegedly submitted false\nand banks from deeding foreclosed properties income and employment information to\nto HUD. acquire an FHA-insured mortgage. As a\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b result, two FHA-insured mortgages valued\n at approximately $225,000 are at risk.\n John Thomas, a former appraiser, was \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nsentenced in U.S. District Court, St. Louis,\nMO, to 3 years probation and ordered to pay Brad Marks and Edwin Rivera, former\nhis victim $40,000 restitution for his owners of the now defunct Quality Builders,\nprevious guilty plea to conspiracy to commit Inc., and Quality Home Remodeling, were\nwire fraud. Thomas and others falsely sentenced in U.S. District Court,\ninflated the value of both FHA-insured and Philadelphia, PA, for Marks\xe2\x80\x99 earlier guilty\nconventionally financed properties, plea and Rivera\xe2\x80\x99s prior conviction on charges\nconcealed needed repair information, and of mail fraud, wire fraud, and aiding and\nreceived payments for bogus appraisals. As abetting. Marks was sentenced to 20 months\na result, six properties obtained fraudulent incarceration and 3 years probation and\nFHA-insured mortgages valued at $650,000. ordered to pay $400,000 to the victims.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Rivera was sentenced to 41 months\n incarceration and 3 years probation and\n Dwayne Jones, a former loan officer at ordered to pay the above restitution jointly\nthe now defunct First Funding Mortgage and severally with Marks. Marks and Rivera\nBankers (FFMB), pled guilty in U.S. District induced Latino homeowners into signing\nCourt, Brooklyn, NY, to one count of home improvement contracts; assisted them\nconspiracy to defraud the United States. with obtaining low-cost bank or HUD-\nJones submitted false statements to HUD insured Title I financing; obtained\nand Countrywide Home Loans when he homeowner loan proceeds; and provided\nflipped his personal property to a relative, incomplete, shoddy, or no property\nwho obtained an FHA-insured mortgage improvements as promised. As a result,\nthrough FFMB for $75,000 more than the homeowner loss is estimated at more than\napproved purchase price. Jones received $400,000.\nproceeds in excess of $51,000 and a short\npayoff on his original FHA-insured Identity Fraud and FFalse\n alse\nloan, also serviced by Countrywide.\nCountrywide, unaware that the property on Social Security Number\n Numberss\nwhich it approved a short payoff was flipped\nto a straw buyer for $75,000 more than the Vincent Sirolli, owner of Encore\napproved purchase price, submitted a claim Mortgage Services, Inc. (EMS); Keith Lyon,\nto HUD for more than $85,000. EMS Chief Operating Officer; Dana\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Siciliano, EMS loan officer; June Kodiak,\n EMS underwriter; Ciriaco Gatta, also known\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 25\n\x0c as Jack Gatta, an appraiser; Mary Diantonio defaulted, and HUD realized a loss greater\n and Anthony Giampietro, settlement agents than $50,000.\n at Rittenhouse Abstract and Title Company; \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Mahn Huu Doan, also known as Bruce\n Doan; Trung Tam Dang; and straw buyer/ Kathleen Ramon, also known as\n seller Zu-Yun Kim, also known as Andy Kathleen Hagan and doing business as El\n Kim, were indicted in U.S. District Court, Mercado de Kansas City, was charged in\n Philadelphia, PA, on numerous counts of Johnson County District Court, Kansas City,\n conspiracy, wire fraud, false statements to KS, with nine counts of unlawful use of\n HUD, identity fraud, and aiding and driver\xe2\x80\x99s license and making a false writing.\n abetting. The above defendants allegedly Ramon, through El Mercado de Kansas City,\n purchased properties using false or allegedly received payments from\n borrowed identities, submitted and/or undocumented immigrants obtaining\n processed false financial documents and fraudulent Kansas-issued drivers\xe2\x80\x99 licenses.\n inflated appraisals, and concealed financial In addition, Ramon allegedly coached\n transactions at loan settlements to secure undocumented immigrants on obtaining\n more than 180 fraudulent FHA-insured mortgage and bank loans and insurance and\n mortgages valued in excess of $11 million. filing tax documents under assumed\n As a result, HUD realized losses of identities. As a result, seven FHA-insured\n $11,781,000 when 180 properties defaulted. mortgages valued at $480,631 were\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b identified, and 150 fraudulent drivers\xe2\x80\x99\n licenses obtained.\n Lesly Bardales, a self-employed tax \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n preparer, pled guilty to an information filed\n in U.S. District Court, Los Angeles, CA, Sergio Manual Rodriguez, a former\n charging him with mail fraud and unlawful FHA-insured mortgagor, was indicted in\n transfer of an identification document. U.S. District Court, Macon, GA, on one\n Bardales created false pay stubs and IRS count each of Social Security fraud and false\n W-2 documents and conspired with a former statements. Rodriguez allegedly used the\n Social Security Administration (SSA) identity of another person to obtain and\n employee to obtain and use genuine Social default on an FHA-insured mortgage loan.\n Security cards and numbers for unqualified As a result, HUD realized a loss greater than\n borrowers obtaining FHA-insured $40,000.\n mortgages. As a result, more than 100 FHA- \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n insured mortgages valued in excess of $1.3\n million were obtained, and HUD realized David J. Brown, owner of 12 Volt, an\n losses of $135,899 when eight loans electronics retailer, pled guilty in U.S.\n defaulted. District Court, Washington, DC, to an\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b information charging him with bank fraud.\n Brown and other conspirators laundered\n James Rucker, a mortgage broker with credit card fraud proceeds by purchasing\n Ravenswood Mortgage, pled guilty in U.S. approximately 11 HUD REO properties\n District Court, Chicago, IL, to one count of using false financial documents and bogus\n wire fraud. Rucker submitted FHA-insured identifications. After purchasing HUD REO\n loan packages containing false identification, properties, Brown falsified documents and\n downpayment, employment, tax, and other leased some properties to Washington, D.C.\n financial information for unqualified and/or Housing Authority for use in its rental\n straw buyers obtaining FHA-insured assistance program.\n mortgages. As a result, one property \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n26 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0c Edward Futch, also known as Edward America $9,122 restitution for her earlier\nDaniels, was sentenced in U.S. District bankruptcy fraud conviction. Kessinger\nCourt, Norfolk, VA, to 3 years probation, acquired one FHA-insured and two VA-\nordered to cease using the name and identity guaranteed properties using a bogus name\nof Edward Daniels, and fined $1,000 for his and SSN, failed to make mortgage payments,\nearlier guilty plea to one count of making and filed multiple sham bankruptcies to\nfalse statements to HUD. Futch possessed hinder foreclosure proceedings.\nand used identities and SSNs in two names, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nobtained credit under both, and applied for\nand received an FHA-insured mortgage Debra Ahmad-Bey, a Chicago Housing\nloan by submitting fraudulent Authority (CHA) Section 8 landlord, Chicago\ndocumentation. The FHA-insured loan was police officer, and the former president of\ncured from default status, and HUD realized Developing Economical & Better Living, Inc.,\nno loss. a nonprofit organization permitted to acquire\n discounted HUD REO properties, was\nBankr uptc\n uptcyy Fraud\nBankruptc convicted in U.S. District Court, Chicago, IL,\n on seven counts of bankruptcy fraud. Ahmad-\n Bey failed to report her nonprofit business,\n Richard Leroy Davis, owner of\n extensive proceeds from the resale of HUD\nForeclosure and Tenant Company Association,\n REO properties, CHA Section 8 rental\npled guilty in U.S. District Court, Detroit, MI,\n assistance payments, or income from her\nto one count of mail fraud. Davis and\n employment with the Chicago Police\npreviously convicted conspirators Chris\n Department and various nursing companies\nThomas and Milton Goddard acquired partial\n on two distinct bankruptcy petitions.\nownership in 600 distressed properties, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nincluding 120 properties with FHA-insured\nmortgages; filed fraudulent bankruptcies to\nforestall foreclosure proceedings; and Other Single-F\n Sing amil\n amilyy Fraud\n le-Famil\nskimmed property equity by diverting\nmonthly payments. As a result, 100 properties Steven Lucas and Robert Bronke, former\nvalued at $7 million defaulted, and HUD employees of now-defunct Dollars Express,\nlosses are yet to be determined. a HUD/FHA 203K general contractor, each\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b pled guilty in U.S. District Court, Chicago,\n IL, to one count of wire fraud. Arnold\n Salvador Bernal Hernandez pled guilty Gillard, a former maintenance supervisor,\nin U.S. District Court, Salt Lake City, UT, to was sentenced to 48 months incarceration\nmaking false statements, false bankruptcy and ordered to pay First Tennessee Bank\ndeclaration, false bankruptcy documents, $260,275 restitution for his earlier guilty plea\nand misuse of an SSN. Hernandez acquired to wire fraud. Lucas, Bronke, Gillard, and\nthe identity of others, used their identities others defrauded HUD and First Tennessee\nto obtain three properties with FHA-insured Bank by recruiting straw buyers and falsifying\nmortgages, and filed fraudulent completed work orders to facilitate the release\nbankruptcies to avert foreclosure of contracting escrow funds on more than 70\nproceedings. As a result of foreclosures, FHA-insured 203K mortgaged properties. As\nHUD realized losses of $225,000. a result, HUD realized losses in excess of $4\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b million.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n Barbara Kessinger, also known as Sheila\nMurphy, was sentenced in U.S. District Court, Isaac Lee Woods and Regina Bailey\nChicago, IL, to 3 years probation and ordered Woods, owners and officers of Woodbai, Inc.,\nto pay HUD $97,079, VA $13,807, and Bank of a mortgage lender doing business as\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 27\n\x0c Unlimited Financial Resources, were both\n convicted in U.S. District Court, New Bern,\n NC, on 32 counts of conspiracy, wire fraud,\n false statements, and money laundering.\n Isaac and Regina Woods created phony\n mortgages, electronically submitted the\n bogus mortgages to the secondary mortgage\n market, and caused Government National\n Mortgage Association to guarantee $1.4\n million in counterfeit investments. As a\n result, Isaac and Regina Woods fraudulently\n acquired more than $1 million, used most\n of the money to purchase rental properties\n in Durham, NC, and leased some of the\n properties to Durham Housing Authority\n for use in its Section 8 program. In addition,\n Timothy Eugene Benjamin, a defense\n witness who testified at the U.S. v Woods\n trial, was indicted in U.S. District Court,\n Raleigh, NC, on numerous counts of\n conspiracy, endeavoring to obstruct justice\n and aiding and abetting, attempted witness\n tampering and aiding and abetting, and\n false declarations in court. During Isaac and\n Regina Woods\xe2\x80\x99 trial, Benjamin allegedly\n telephoned a government witness; made\n numerous false, misleading, and/or\n threatening statements; and attempted to\n influence or prevent the witness from\n testifying. In addition, while testifying on\n the Woods\xe2\x80\x99 behalf, Benjamin allegedly made\n materially false declarations.\n Copyright, 2006. Tribune - Chicago, IL.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Reprinted with permission.\n\n Steven Marquez, a loan officer at Primera\n Mortgage Company, was charged in a Dariusz Przybylek, an investor, and\n superseding indictment filed in Cook County Erwin Espe, a former HUD-approved\n Circuit Court, Chicago, IL, with multiple appraiser, were arrested after criminal\n counts of theft. Marquez allegedly deceived complaints were filed in U.S. District Court,\n two property owners and acquired rights to Chicago, IL, charging them with mail and\n their properties, sold the properties to wire fraud. Przybylek allegedly attempted\n borrowers obtaining FHA-insured mortgages, to purchase a HUD-owned property for 150\n and collected the sales proceeds. The property percent of the HUD-appraised value by\n owners, believing they were refinancing their submitting an inflated appraisal, phony\n original loan, mistakenly signed \xe2\x80\x9cpower of contractor affidavits, and fraudulent loan\n attorney\xe2\x80\x9d documents assigning their documents to facilitate his receipt of\n homeownership rights to Marquez. The new $113,000 for property rehabilitation through\n FHA-insured mortgages valued at more than a straw contractor at closing.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n $250,000 are in foreclosure, and HUD losses\n are yet to be determined.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n28 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0c Kenneth Mixon was charged with two months probation and ordered to pay the\ncounts of false pretenses and breaking and court $500; Reed was sentenced to 24 months\nentering with illegal entry in a criminal probation and ordered to pay the court $500.\ncomplaint filed in Wayne County Court, In addition, the above defendants agreed to\nDetroit, MI. Mixon allegedly entered HUD- a 36-month governmentwide debarment.\nowned properties, presented himself as the Shatanya Fitchpatrick and her previously\nowner and collected tenant rents in excess of indicted husband, Bryon Fitchpatrick, used\n$4,700, and unlawfully resided in one illicit drug sales proceeds to purchase HUD-\nproperty. As a result, HUD losses are owned properties as investments through\nestimated at approximately $45,700, Alam via straw buyers Kathleen\nincluding $41,000 in property damage. Fitchpatrick, Jones, and Reed. After\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b purchasing the properties, Bryon\n Fitchpatrick used the homes to store illegal\n Israel Pena, a former youth pastor at a drugs before renting or selling the\nchurch in Bronx, NY, was found guilty in properties.\nU.S. District Court, White Plains, NY, of \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nconspiracy, bank fraud, and mail fraud.\nFrom 1998 to 2001, Pena purchased Maritza Portillo, a real estate agent and\nproperties in the New York metropolitan loan officer at Transatlantic Financial\narea, flipped the properties to unqualified Corporation, Covina, CA, was sentenced in\nfirst-time homebuyers at a substantial profit, U.S. District Court, Los Angeles, CA, to 3\nand assisted the ineligible borrowers in months in a community corrections center,\nobtaining both FHA-insured and 6 months house arrest with electronic\nconventional mortgages by submitting false monitoring, and 27 months supervised\nloan documents and/or providing fictitious release for violating the terms and\ndownpayment deposits. As a result, HUD conditions of her federal probation, a result\nrealized a loss of $16,000 when one FHA- of her earlier guilty plea to conspiracy to\ninsured property defaulted. commit bribery. While on probation, Portillo\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b enticed and paid an individual to act as a\n straw buyer and purchase residential\n Shatanya Fitchpatrick, also known as investment property, promising to remit a\nShatanya Douglas, owner of ABS Rentals portion of the sale proceeds when reselling\nand Investments; Manjur Alam, a realtor at the property at a later date. Portillo sold the\nReMax Preferred Properties; and straw property, failed to divide the sale proceeds\nbuyers Kathleen Fitchpatrick, Deverell with the straw buyer, and diverted the funds\nJones, and Demond Reed were each to other business associates. In addition,\nsentenced in U.S. District Court, Wichita, Portillo recruited a relative to collect rents\nKS, for their earlier guilty pleas to numerous from tenants residing in eight additional\ncounts of conspiracy to commit fraud properties she purchased through straw\nagainst HUD, false statements to HUD, and/ buyers; three of the properties had FHA-\nor wire fraud. Shatanya Fitchpatrick was insured mortgages.\nsentenced to 4 months incarceration and 36 \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nmonths probation and ordered to pay the\nU.S. Department of Agriculture $22,552 James Elliott Coleman, the former\nrestitution; Alam was sentenced to 12 president of the Allen Village Charter School\nmonths probation and ordered to pay HUD (AVCS) Board, pled guilty in U.S. District\n$2,000 restitution; Kathleen Fitchpatrick was Court, Kansas City, MO, to 11 counts of\nsentenced to 12 months probation and conspiracy, federal program fraud, and\nordered to pay the court $500; Jones was interstate transportation of stolen funds.\nsentenced to 3 months incarceration and 24 Coleman embezzled then repaid AVCS more\n\n\nHUD\xe2\x80\x99s Single-Family Housing Programs 29\n\x0c than $47,000 in funds he obtained through charges. Davis, previously indicted on false\n a mortgage investment fraud scheme. statements under HUD\xe2\x80\x99s OTND program,\n Coleman and previously indicted James attempted to influence the testimony of a\n Lynn Woolard solicited investors for witness/tenant in an effort to hide his true\n mortgage investments, provided false residency at the OTND property. Davis\n documents to obtain conventional mortgage purchased a HUD-owned property through\n loans on the investment properties, and HUD\xe2\x80\x99s OTND program in Rialto, CA, failed\n leased the properties to various to reside at the property, leased the property\n organizations providing HUD-subsidized for approximately 34 months, collected rents\n housing assistance payments. totaling $23,800, and falsely certified his\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b residency at the property on annual\n certifications. As a result, HUD realized\n Barry Oaks, Sr., a San Joaquin Sheriff\xe2\x80\x99s losses approximating $60,300.\n Office deputy, entered into a settlement \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n agreement with the U.S. Attorney\xe2\x80\x99s Office,\n Sacramento, CA, agreeing to pay HUD James Anthony Street, a former U.S.\n $70,293. Oaks purchased but failed to reside Postal Inspection Service police officer, was\n in property he acquired through HUD\xe2\x80\x99s sentenced in U.S. District Court, Los\n Officer/Teacher Next Door (OTND) Angeles, CA, to 1 year probation and\n program. ordered to pay a $2,100 fine for his earlier\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b guilty plea to false statements. Street, a\n participant in HUD\xe2\x80\x99s OTND program,\n John Henry Davis, a California licensed owned property in Bloomington, CA, when\n real estate agent and lieutenant at Ironwood he submitted written certifications claiming\n State Prison in Blythe, CA, was convicted in the OTND property he purchased in Long\n U.S. District Court, Los Angeles, CA, on one Beach, CA, was his sole residence. Street\n count of attempting to corruptly influence paid HUD $48,500 when he sold the OTND\n a witness and acquitted of false statement property.\n\n\n\n\n30 HUD\xe2\x80\x99s Single-Family Housing Programs\n\x0c Chapter 3\nHUD\xe2\x80\x99\nHUD\xe2\x80\x99ss Public and Indian\n Housin\n Housingg Pr og rams\n Pro\n\x0c The U.S. Department of Housing and area. These reports disclosed more than\n Urban Development (HUD) provides grants $47.1 million in questioned costs and about\n and subsidies to more than 2,637 public $61 million in recommendations that funds\n housing authorities (PHA) nationwide. be put to better use. During this reporting\n More than 1,657 PHAs manage public period, OIG reviewed Section 8 Housing\n housing units, and almost 980 with Choice Voucher program activities,\n no public housing manage units public housing activities, including the\n under Section 8 tenant-based programs. low-rent housing and Moving to Work\n PHAs administer both public housing (MTW) Demonstration programs and the\n and Section 8 programs. HUD also operating fund program.\n provides assistance to PHAs\xe2\x80\x99 resident\n organizations to encourage increased\n resident management entities and resident\n Section 8 Housing Choice\n Housing\n skills programs. Programs administered Vouc her Pr\n oucher ogram Acti\n Pro vities\n Activities\n by PHAs are designed to enable low-income\n families, the elderly, and persons with Audits of the Section 8 Housing Choice\n disabilities to obtain and reside in housing Voucher program were a priority during this\n that is safe, decent, sanitary, and in good semiannual reporting period. In HUD\xe2\x80\x99s\n repair. fiscal year (FY) 2006 appropriation, the\n Congress directed OIG to increase its audit\n Audits and investigative efforts related to public\n housing agencies\xe2\x80\x99 administration of this\n During this reporting period, the Office program. Public housing agencies were\n of Inspector General (OIG) issued 47 reports: selected for audit based on risk analysis and/\n 5 internal and 42 external audits in the or hotline complaints. While OIG\xe2\x80\x99s\n public and Indian housing (PIH) program objectives varied by auditee, the majority of\n\n A Look Bac\n Backk ffor\n or the Year\n Year\n Char\n Chartt 3.1: Per centa\n Percenta ge of OIG Public and Indian Housin\n centag g Closed Audit Cases\n Housing Cases,,\n Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 6%\n Chicago\n Region 7-8\n 17% Region 2\n Kansas City\n 14% New York\n 10%\n\n\n\n\n Region 3\n Philadelphia\n 12%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 10% Atlanta\n Region 6 19%\n Fort Worth\n 12%\n\n\n\n32 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cthe reviews were to determine whether the not adequately manage its Section 8\nunits met housing quality standards, program. It made ineligible transfers of\nwhether the PHA managed the program program funds from Section 8\naccording to HUD requirements, and administrative fee reserves to its low-rent\nwhether the eligibility of the tenants was housing program and from the capital fund\ncorrectly determined. to its Section 8 program. In addition, it did\n not maintain adequate documentation for\n HUD OIG audited the Housing rent and employee benefits costs charged to\nAuthority of the County of Cook\xe2\x80\x99s, Chicago, the Section 8 program and for payments to\nIL, Section 8 Housing Choice Voucher the City of Passaic for police services.\nprogram based upon a risk analysis that Further, an inspection of 65 units revealed\nidentified it as having a high-risk program. that 44 units failed for material\n noncompliance with housing quality\n Of the 83 housing units inspected, 64 standards.\ndid not meet HUD\xe2\x80\x99s housing quality\nstandards, and 61 had 279 violations that OIG recommended that HUD instruct\nexisted at the time of the Authority\xe2\x80\x99s the Authority to (1) reimburse the Section 8\nprevious inspection. In addition, the administrative fee reserve for the $1 million\nAuthority improperly permitted 18 of 31,587 transferred to the low-rent housing program\nindividuals reviewed to be claimed as and recapture or reduce Section 8\ndependents in more than one program unit, administrative fees by more than $590,000;\nresulting in more than $20,000 in (2) reimburse the capital fund more than\noverpayments of program housing $401,000 from the Section 8 program; (3)\nassistance. The Authority also failed to provide additional supporting\ndetermine the reasonableness of program documentation for rent expenses, employee\nrents before approving housing assistance benefits costs, and payments for police\npayment contracts for 11 of the 20 tenant services and repay any unsupported costs\nfiles reviewed and lacked documentation to determined to be ineligible; and (4) develop\nsupport when its rent reasonableness and implement procedures to ensure that\ndatabase was last updated. As a result, units meet housing quality standards.\nprogram funds were not used efficiently and (Audit Report: 2006-NY-1012)\neffectively, and fewer funds were available \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\nto assist low- and moderate-income families\non the Authority\xe2\x80\x99s waiting list. HUD OIG audited the Metropolitan\n Development and Housing Agency\xe2\x80\x99s,\n OIG recommended that HUD require Nashville, TN, inspection of Section 8 units.\nthe Authority to reimburse its program from Of 71 Section 8 units inspected, 52 did not\nnonfederal funds for the improper use of meet minimum housing quality standards,\nmore than $123,000 in program funds, and 30 of those were in material\nensure that program housing units noncompliance. As a result, tenants lived\ninspected during the audit are repaired to in units that were not decent, safe, and\nmeet HUD\xe2\x80\x99s housing quality standards, and sanitary, and the Agency made housing\nimplement procedures and controls to assistance payments for units that did not\naddress the findings reported. (Audit meet standards.\nReport: 2006-CH-1012)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b OIG recommended that HUD require\n the Agency to inspect the 52 units that did\n HUD OIG audited the Housing not meet minimum housing quality\nAuthority of the City of Passaic, Passaic, NJ. standards to verify that the owners took\nFrom 2002 through 2005, the Authority did appropriate actions. If appropriate actions\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 33\n\x0c were not taken, the Agency should abate the existed at the time of the Authority\xe2\x80\x99s\n rents or terminate the housing assistance previous inspection. In addition, of the 8,976\n payment contracts. HUD should also unit inspections conducted by the Authority\n require the Agency to implement internal in calendar year 2005, 966 were not\n controls that ensure units meet HUD\xe2\x80\x99s conducted within the required 1 year of the\n housing quality standards and inspection previous inspection, and 35 of the 76 files\n requirements to prevent more than $8.7 reviewed did not contain the documentation\n million from being spent on units that are required by HUD and the Authority\xe2\x80\x99s\n in material noncompliance with standards. program administrative plan. The Authority\n (Audit Report: 2006-AT-1009) also incorrectly calculated housing\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b assistance payments, resulting in more than\n $12,000 in overpayments and more than\n HUD OIG audited the Columbus $11,000 in underpayments from January\n Metropolitan Housing Authority\xe2\x80\x99s, 2003 through December 2005.\n Columbus, OH, Section 8 Housing Choice\n Voucher program based upon a risk analysis OIG recommended that HUD require\n that identified it as having a high-risk the Authority to reimburse its program from\n program. nonfederal funds for the improper use of\n more than $83,000 in program funds,\n Of the 67 housing units inspected, 47 provide documentation or reimburse its\n did not meet HUD\xe2\x80\x99s housing quality program more than $332,000 from\n standards, and 34 had 164 violations that nonfederal funds for the unsupported\n housing assistance payments and\n administrative fees, ensure that units\n inspected during the audit are repaired to\n meet HUD\xe2\x80\x99s housing quality standards, and\n implement adequate procedures and\n controls to ensure that program units meet\n housing quality standards. (Audit Report:\n 2006-CH-1011)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n HUD OIG audited the Housing\n Authority of the County of Cook\xe2\x80\x99s, Chicago,\n IL, Section 8 Housing Choice Voucher\n program based upon a risk analysis that\n identified it as having a high-risk program.\n\n Of the 70 households\xe2\x80\x99 files reviewed, the\n Authority incorrectly calculated housing\n assistance payments for 26 and lacked\n supporting documentation regarding\n admission and selection for five households,\n resulting in nearly $28,000 in overpayments\n of program housing assistance and utility\n allowances and more than $47,000 in\n unsupported housing assistance. The\n Authority also failed to adequately use\n HUD\xe2\x80\x99s Enterprise Income Verification (EIV)\n Copyright, 2006. The Columbus Dispatch- system to determine that reported zero-\n Columbus, OH. Reprinted with permission. income households had unreported income,\n\n34 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cresulting in more than $62,000 in improper more than $22,000 in unsupported\nhousing assistance and utility allowance payments, more than $21,000 in\npayments. It also did not monitor and overpayments, and nearly $1,300 in\ncorrect escrow balances of its Family Self- underpayments from April 2004 through\nSufficiency Program participants and March 2006.\naccurately account for payments related to\nhousehold portability. As a result, program OIG recommended that HUD require\nfunds were not always used efficiently and the Authority to (1) reimburse its program\neffectively, and fewer funds were available from nonfederal funds for the improper use\nto assist low- and moderate-income families of program funds, (2) provide support or\non the Authority\xe2\x80\x99s waiting list. reimburse its program from nonfederal\n funds for the unsupported housing\n OIG recommended that HUD require assistance and utility allowance payments\nthe Authority to (1) reimburse its program and related administrative fees, and (3)\nfrom nonfederal funds for the improper use implement adequate procedures and\nof program funds, (2) provide support or controls to address the findings cited to help\nreimburse its program from nonfederal ensure that nearly $2 million in program\nfunds for the unsupported housing funds are spent on payments that meet\nassistance payments and related HUD\xe2\x80\x99s requirements. (Audit Report: 2006-\nadministrative fees, and (3) implement CH-1019)\nadequate procedures and controls to \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\naddress the findings cited to help ensure\nthat more than $3.4 million in program HUD OIG audited the Ann Arbor\nfunds are spent on housing assistance Housing Commission\xe2\x80\x99s, Ann Arbor, MI,\npayments that meet HUD\xe2\x80\x99s requirements. Section 8 Housing Choice Voucher program,\n(Audit Report: 2006-CH-1021) based upon a risk analysis that identified it\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b as having a high-risk program.\n\n HUD OIG audited the Lucas Of the 62 housing units inspected, 45\nMetropolitan Housing Authority\xe2\x80\x99s, Toledo, did not meet HUD\xe2\x80\x99s housing quality\nOH, Section 8 Housing Choice Voucher standards, and 40 had 125 violations that\nprogram based upon a risk analysis that existed at the time of the Commission\xe2\x80\x99s\nidentified it as having a high-risk program. previous inspections. In addition, the\n Commission improperly calculated the\n Of the 62 housing units inspected, 49 housing assistance payments for 16 of 25\ndid not meet HUD\xe2\x80\x99s housing quality tenant files reviewed and did not perform\nstandards, and 45 had 212 violations that reexaminations in a timely manner. This\nexisted at the time of the Authority\xe2\x80\x99s resulted in more than $7,000 in housing\nprevious inspections. The 45 units had assistance payment errors. Also, the\nbetween 1 and 12 preexisting violations per Commission did not establish an adequate\nunit. OIG estimates that over the next year, cost allocation plan for charging indirect\nthe Authority will pay more than $1.3 costs to its program.\nmillion in housing assistance payments on\nunits with material housing quality OIG recommended that HUD require\nstandards violations. In addition, of 67 files the Commission to reimburse its program\nreviewed, 37 did not contain the from nonfederal funds for the improper use\ndocumentation required by HUD and the of almost $59,000 in program funds, ensure\nAuthority\xe2\x80\x99s program administrative plan. that program housing units inspected\nThe Authority also incorrectly calculated during the audit are repaired to meet HUD\xe2\x80\x99s\nhousing assistance payments, resulting in housing quality standards, and implement\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 35\n\x0c procedures and controls to address the OIG recommended that HUD require\n findings reported. (Audit Report: 2006-CH- the Authority to (1) correct the voucher size\n 1013) for overhoused tenants, (2) repay HUD for\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b the housing assistance overpayments, (3)\n improve and correct its procedures for\n HUD OIG audited the Orange City assigning subsidy size to avoid future losses\n Housing Authority\xe2\x80\x99s, Orange, NJ, Housing of up to $768,000, and (4) take the necessary\n Choice Voucher program. Of 59 Section 8 action to reduce the Authority\xe2\x80\x99s FY 2006\n units inspected, 55 did not meet minimum Section 8 budget by more than $189,000.\n housing quality standards, 37 of which were (Audit Report: 2006-FW-1015)\n in material noncompliance. As a result, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n tenants lived in units that were not decent,\n safe, and sanitary, and HUD made housing HUD OIG audited the Municipality of\n assistance payments for units that did not Bayamon Housing Authority\xe2\x80\x99s, Bayamon,\n meet housing quality standards. PR, Section 8 Housing Choice Voucher\n Additionally, the Authority did not always program. Of the 66 units inspected, 58 did\n allocate expenses accurately to the Housing not meet minimum housing quality\n Choice Voucher program and did not always standards, and 15 were in material\n correctly calculate its housing assistance noncompliance. As a result, tenants lived\n payments and obtain necessary documents in units that were not decent, safe, and\n related to tenant recertifications. sanitary, and HUD made housing assistance\n payments for units that did not meet\n OIG recommended that HUD instruct standards.\n the Authority to (1) to ensure that units meet\n housing quality standards and that OIG recommended that HUD require\n corrective action has been taken on those the Authority to inspect all of the 58 units\n units that failed to meet standards, (2) that did not meet minimum housing quality\n develop procedures and controls for standards to verify that the landlords took\n allocating and charging costs to the Housing appropriate corrective actions to make the\n Choice Voucher program, (3) provide units decent, safe, and sanitary. If\n documentation for all unsupported cost and appropriate actions were not taken, the\n reimburse any cost determined to be Authority should abate the rents or\n ineligible, and (4) establish procedures to terminate the tenants\xe2\x80\x99 vouchers. HUD also\n ensure that all voucher recertification should require the Authority to implement\n information for tenants and landlords is an internal control plan and incorporate it\n adequately supported and documented. into the Authority\xe2\x80\x99s Section 8 administrative\n (Audit Report: 2006-NY-1010) plan to ensure that units meet HUD\xe2\x80\x99s\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b housing quality standards and inspections\n meet HUD requirements. (Audit Report:\n HUD OIG audited the Housing 2006-AT-1015)\n Authority of the City of Austin\xe2\x80\x99s, Austin, TX, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Section 8 Housing Choice Voucher program.\n In 482 of the 662 vouchers reviewed, the HUD OIG audited the Orlando, FL,\n Authority applied the correct voucher size Housing Authority\xe2\x80\x99s Section 8 Housing\n and correctly computed housing assistance Choice Voucher program. Of 67 Section 8\n payments. However, it overhoused 180 units inspected, 20 did not meet standards,\n tenants and paid more than $588,000 in and eight of those were in material\n excess housing assistance payments. In noncompliance. As a result, the Authority\n addition, HUD overfunded the Authority\xe2\x80\x99s paid more than $31,000 in ineligible\n FY 2006 Section 8 Housing Choice Voucher subsidies and more than $10,000 in excess\n program budget by more than $189,000. housing assistance payments for 5 of 22\n\n36 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0ctenants housed in units larger than justified OIG recommended that HUD require\nby the families\xe2\x80\x99 composition. the Authority to (1) support or reimburse\n HUD more than $1 million in unsupported\n OIG recommended that HUD require Section 8 housing assistance payments, (2)\nthe Authority to abate Section 8 subsidies implement the necessary controls and/or\nor terminate housing assistance payment revisions to its administrative plan to ensure\ncontracts on all units that do not meet that the eligibility determinations are made\nstandards if the violations detected are not properly in the future, and (3) conduct\ncorrected in a timely manner. HUD should training with Section 8 personnel on the new\nalso require the Authority to improve its controls and procedures. (Audit Report:\ncontrols over the inspection process to 2006-LA-1012)\nensure that inspectors properly identify and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nreport all housing quality standards\nviolations in the units they inspect to HUD OIG audited the Rockford\nprevent more than $1.1 million from being Housing Authority\xe2\x80\x99s, Rockford, IL, Section\nspent on units with material housing quality 8 Housing Choice Voucher program based\nstandards violations. HUD should further upon a risk analysis that identified the\nrequire the Authority to repay more than Authority as having a high-risk program. Of\n$31,000 from nonfederal funds for ineligible 85 files reviewed, 73 did not contain\nhousing assistance payments it made for the documentation required by HUD and the\neight units with material violations. Authority\xe2\x80\x99s program administrative plan to\n support more than $547,000 in housing\n OIG also recommended that HUD assistance and utility allowance payments.\nrequire the Authority to reimburse its The Authority incorrectly calculated\nprogram from nonfederal funds more than households\xe2\x80\x99 payments, resulting in nearly\n$10,000 for excess housing assistance $50,000 in overpayments and more than\npayments for five overhoused tenants plus $2,500 in underpayments for the period\nany additional amount paid until corrective October 2003 through November 2005. OIG\naction is taken. HUD should also require estimates that over the next year, the\nthe Authority to establish controls to ensure Authority will overpay more than $338,000\ninitial determination of the correct voucher in housing assistance and utility allowance\nsize and to adjust tenant vouchers in a payments.\ntimely manner to reflect reported changes\nin family composition. HUD should further OIG recommended that HUD (1)\nrequire the Authority to issue the correct size require the Authority to provide\nvoucher to overhoused tenants and ensure documentation or reimburse its program\nthat their subsidy amounts are properly from nonfederal funds for the unsupported\ncalculated. (Audit Report: 2006-AT-1010) housing assistance and utility allowance\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b payments and associated administrative\n fees, (2) reimburse its program from\n HUD OIG audited the Housing nonfederal funds for the improper use of\nAuthority of the City of Los Angeles\xe2\x80\x99 tenant program funds, (3) reimburse the\neligibility determinations for its Section 8 appropriate households for the\nHousing Choice Voucher program. The underpayment of housing assistance and\nAuthority did not establish and document utility allowance payments, and (4)\nits Section 8 tenants\xe2\x80\x99 eligibility to receive implement adequate procedures and\nhousing choice vouchers in 76 of 133 cases controls to address the deficiencies\nreviewed. As a result, the Authority paid identified. (Audit Report: 2006-CH-1020)\nmore than $1 million in unsupported and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nineligible housing assistance payments.\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 37\n\x0c HUD OIG audited the Section 8 $51,000 in ineligible or unsupported subsidy\n program administered by the Housing payments for these tenants.\n Authority of the City of Denton, Denton,\n TX. The Authority applied its decreased OIG recommended that HUD require\n payment standards without granting the the Authority to (1) repay tenants for\n required grace period. Further, it did not subsidy underpayments caused by\n grant disability allowances for six eligible decreasing payment standards too early and\n tenants in determining adjusted income. As not granting disability allowances, (2) repay\n a result, it underpaid an estimated $126,000 its Section 8 account for overpayments from\n in subsidies for 447 tenants. Twenty-nine overhousing tenants, (3) strengthen its\n tenants were overhoused because the quality control process, and (4) develop and\n Authority assigned a voucher size that implement controls to ensure that the\n exceeded its subsidy size standards with procedural errors identified during the audit\n either no explanation or questionable are corrected and avoided in the future.\n justification. The Authority paid almost (Audit Report: 2006-FW-1013)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n Copyright, 2006. Denton Record-Chronicle - Denton, TX. Reprinted with permission.\n\n38 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c HUD OIG reviewed the Section 8 for-profit entity in accordance with HUD\nHousing Choice Voucher program at the regulations.\nPortland Housing Authority in Portland,\nME. The Authority did not use its Section 8 The Authority improperly issued\nadministrative fee reserves in a timely housing choice vouchers to 22 tenants and\nmanner or properly allocate salary and erroneously disbursed more than $49,000 in\nemployee benefits expenses to the program. housing assistance payments. It lacked a\nIt transferred Section 8 administrative fee system to monitor the results of housing\nreserves to its local programs account, but quality standards inspections to ensure that\nas of March 2006, it had not used almost housing assistance payments were abated\n$648,000 of these reserve funds for program when needed and to document that it\nor other housing purposes. It also conducted quality control inspections as\nundercharged its program by more than required by HUD regulations. Weaknesses\n$158,000 in salary and employee benefits in the Authority\xe2\x80\x99s financial management\nexpenses because its cost allocation system allowed the disbursement of more\nprocedures improperly charged the than $588,000 for questionable and ineligible\nprogram costs to its Public Housing Capital costs and caused the incorrect calculation of\nFund program when the Housing Choice Section 8 administrative fees. Further, the\nVoucher program had funding shortfalls. Authority did not obtain a partial release of\n declaration of trust from HUD to transfer\n OIG recommended that HUD require properties to its not-for-profit entity as\nthe Authority to (1) repay to its Section 8 required by HUD regulations.\nprogram the unused portion of almost\n$648,000 in administrative fee reserve funds OIG recommended that HUD reallocate\ntransferred to its local programs account and the Authority\xe2\x80\x99s unused housing choice\nprovide supporting documents for vouchers and require it to (1) seek a HUD\nverification of the more than $158,000 in waiver to allow tenants who were\ntransferred reserve funds to the Public improperly issued vouchers to retain them,\nHousing Capital Fund program, (2) identify (2) seek reimbursement of ineligible housing\ncurrent and valid uses for the remaining assistance payments, (3) establish a system\nSection 8 administrative reserves (almost to track housing quality inspection activities,\n$490,000), and (3) establish and implement (4) develop and implement financial controls\nformal written procedures to properly to ensure proper allocation and\nallocate costs to the benefiting programs. In disbursement of funds, and (5) obtain\naddition, OIG recommended that HUD properly approved partial release of\nverify the repayment of more than $158,000 declaration of trust documents for property\nto the Authority\xe2\x80\x99s Public Housing Capital transferred for sale under the\nFund program for ineligible administrative homeownership program. (Audit Report:\nexpenses. (Audit Report: 2006-BO-1011) 2006-NY-1008)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n HUD OIG audited the Freeport HUD OIG audited the Dallas County\nHousing Authority, Freeport, NY, to Housing Agency\xe2\x80\x99s, Dallas, TX, Section 8\ndetermine whether it (1) implemented program. The Agency operated its Section\nadmission policies that complied with HUD 8 program in compliance with HUD\nrequirements, (2) ensured that Section 8 requirements. It computed housing\nprogram units met housing quality assistance payments correctly and had\nstandards, (3) maintained a financial effective controls in place to ensure that it\nmanagement system that adequately met housing quality standards. However,\nsafeguarded funds, and (4) operated its not- it overhoused 34 tenants by granting\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 39\n\x0c unjustified subsidy size exceptions and allocations; (2) develop and implement a\n unnecessarily paid more than $63,000 in reasonable method for allocating costs to the\n housing assistance payments for 23 of the Section 8 program, thereby putting more\n tenants. than $76,000 to better use over a 1-year\n period; (3) repay its Section 8 program more\n OIG recommended that HUD require than $500 and reimburse clients more than\n the Agency to (1) repay ineligible housing $1,000 from its earned Section 8\n assistance overpayments of more than administrative fees for housing assistance\n $63,000 and (2) improve its procedures to overpayments and underpayments; and (4)\n ensure that it assigns the correct subsidy develop and implement procedures for\n size for all tenants. (Audit Report: 2006- calculating rents correctly, maintaining\n FW-1009) client files adequately, performing quality\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b control reviews of its client files, and\n performing adequate rent reasonableness\n HUD OIG audited the Housing determinations. (Audit Report: 2006-PH-\n Authority of the County of Butler to 1010)\n determine whether the Authority was \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n properly administering its Section 8\n Housing Choice Voucher program. The HUD OIG audited the Benton Harbor\n Authority generally administered its Section Housing Commission\xe2\x80\x99s, Benton Harbor, MI,\n 8 program properly, but some Public Housing Capital Fund program. The\n improvements were needed. The Authority, Commission lacked documentation to\n located in Butler, PA, did not allocate support more than $206,000 in program\n administrative salary and employee benefit expenditures and improperly used $500 in\n costs to the Section 8 program on a program funds to pay expenses related to\n reasonable and fair basis. As a result, it its Housing Choice Voucher program.\n could not support more than $229,000 in Further, the Commission\xe2\x80\x99s procurement\n expenditures for administrative salaries and activities were not conducted according to\n associated employee benefits over a 3-year its and HUD\xe2\x80\x99s requirements.\n period. In addition, the Authority did not\n always calculate housing assistance OIG recommended that HUD require\n payments correctly or maintain adequate the Commission to (1) provide\n documentation in its client files to documentation to support the unsupported\n demonstrate compliance with HUD expenditures or reimburse its program from\n requirements. It also did not have written nonfederal funds for the applicable portion;\n procedures for conducting quality control (2) provide documentation that it\n reviews of the client files, which would have reimbursed its program from its Section 8\n alerted it to the deficiencies. As a result, it housing administrative fees for the improper\n made housing assistance overpayments of payment of expenses related to its Section 8\n more than $500 and underpayments of more Housing Choice Voucher program; and (3)\n than $1,000 in the 21 client files reviewed implement adequate procedures, controls,\n and did not have adequate assurance that and board oversight to correct the\n the housing assistance payments it made to weaknesses cited. (Audit Report: 2006-CH-\n landlords were reasonable. 1010)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n OIG recommended that the Authority\n (1) provide documentation to support the HUD OIG audited the Miami, FL,\n more than $229,000 in questioned employee Miami Dade Housing Agency\xe2\x80\x99s Section 8\n salary and benefit costs or reimburse the Housing Choice Voucher program. The\n Section 8 program from the programs that Agency overhoused 17 tenants and\n benefited from the erroneous costs unnecessarily paid almost $62,000 in excess\n\n40 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0csubsidies on behalf of 13 of the tenants. It HUD OIG audited the Omaha Housing\nalso had 228 tenants who could be Authority in Omaha, NE, to determine\noverhoused with the potential to incur whether the Authority followed HUD\nexcess subsidy payments. By improving its procurement requirements. The Authority\nprocedures, the Agency could avoid future did not follow required procurement\nlosses of almost $82,000, which would allow procedures. It used more than $5,000 in\nit to provide vouchers to additional tenants. HUD funds to purchase ineligible goods and\n services, and it could have saved at least\n OIG recommended that HUD require $970,000 when it purchased $1.9 million in\nthe Agency to (1) submit a corrective action other goods and services.\nplan to correct the 17 overhoused tenant\nvouchers, (2) reimburse its program almost OIG recommended that HUD require\n$62,000 from nonfederal funds, (3) submit a the Authority to repay its low-rent program\ntime schedule to review the additional 228 for the ineligible purchases and improve\ntenants for overhousing and a corrective controls over its procurement process.\naction plan to correct any overhoused tenant (Audit Report: 2006-KC-1010)\nvouchers and reimburse its program from \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nnonfederal funds, and (4) develop and\nimplement procedures to ensure that HUD OIG audited the Saginaw\ntenants receive the proper voucher size to Housing Commission\xe2\x80\x99s, Saginaw, MI,\navoid future losses of almost $82,000. (Audit Public Housing Operating Fund program\nReport: 2006-AT-1012) based on a request from HUD. The\n Commission improperly acquired the\nPublic Housing Authority\n Housing Saginaw County Fairgrounds property,\n which included a harness raceway, using\nMana\nManag gement of Assets nearly $536,000 in program funds. Because\n of the Commission\xe2\x80\x99s improper use of these\n HUD OIG audited HUD\xe2\x80\x99s efforts to funds, its program also lost more than\ncollect a more than $2.7 million debt from $25,000 in interest income that would have\nthe Omaha Housing Authority of Omaha, been realized if the funds had been invested.\nNE, in response to a citizen\xe2\x80\x99s complaint that The Commission failed to file a required\nthe Authority had not taken steps to repay declaration of trust to evidence its covenant\nor resolve the liability. The audit objectives to convey or encumber the property and to\nwere to determine why the liability existed, protect HUD\xe2\x80\x99s rights and interests. Further,\nto whom it was owed, and what efforts HUD the Commission entered into eight rooftop\nmade to collect it. lease agreements without required HUD\n approval and did not restrict more than\n HUD did not ensure that the Authority $12,000 in revenue to pay for program\nrepaid its public housing programs more expenses.\nthan $2.7 million for ineligible program\nactivities, nor did it establish a repayment OIG recommended that HUD require\nagreement. As a result, the Authority\xe2\x80\x99s the Commission to (1) reimburse its\nprograms did not have these funds available program for the inappropriate use of funds\nfor their intended purposes. and lost interest income identified, (2) file a\n declaration of trust on the property if it has\n OIG recommended that HUD establish not been sold, (3) submit its current rooftop\na repayment agreement with the Authority lease agreements to HUD for approval, and\nto resolve the liability. (Audit Report: 2006- (4) implement adequate procedures and\nKC-0003) controls to address the findings cited. OIG\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b also recommended that HUD pursue\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 41\n\x0c administrative sanctions against the nonprofit entities. The audit objectives were\n Commission\xe2\x80\x99s former executive director and to determine whether the Authority, located\n its board members involved in the improper in Macon, GA, used low-income housing\n purchase of property. (Audit Report: 2006- and HOPE VI program funds for\n CH-1018) unauthorized purposes to benefit other\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b entities without specific HUD approval and\n whether the Authority complied with\n Based on a complaint from a member applicable laws and regulations and\n of the Housing Authority of the City of Las properly safeguarded low-income resources\n Vegas\xe2\x80\x99, Las Vegas, NV, board of when it conducted business with affiliated\n commissioners, HUD OIG reviewed the nonprofit entities and consultants.\n Authority\xe2\x80\x99s contracts with Abt Associates to\n determine whether the Authority followed The Authority violated its annual\n federal procurement and contracting contributions contract with HUD by using\n requirements when it hired Abt. OIG funds from its low-income housing general\n expanded its review to determine whether fund account to pay expenses of its\n the Authority retained interest from programs\xe2\x80\x99 affiliated entities. As of December\n improperly invested grant funds. 31, 2004, 11 programs or entities, including\n nonprofit firms and other programs, owed\n The Authority awarded three contracts the general fund account more than\n totaling more than $473,000 to Abt in 2004 $395,000. As a result, the Authority made\n and 2005 in violation of federal requirements ineligible disbursements with low-income\n and its own policies and procedures for housing funds totaling more than $395,000.\n procurement, contracting, and contract Further, the Authority violated its contract\n administration. It also improperly retained with HUD by using low-income public\n investment earnings totaling almost $85,000 housing assets as collateral to guarantee\n from improperly drawn down replacement loans for two affiliated nonprofit entities\n housing factor grant funds for FYs 2000 and totaling $2.2 million, thereby placing\n 2001. contract assets at risk. The original $2.2\n million in loan balances guaranteed has been\n OIG recommended that HUD require reduced to $125,000, which is the amount\n the Authority to provide adequate support currently at risk. Additionally, the Authority\n of cost reasonableness or reimburse the low- violated federal contracting requirements by\n rent housing program more than $473,000 entering into an open-ended contract with a\n from nonfederal funds, reimburse the consultant without a ceiling price. The\n Federal Government for the almost $85,000 Authority spent almost $228,000 on the\n in interest earned on the grant funds, take contract, which has been in effect since\n appropriate administrative sanctions November 2001.\n against responsible Authority officials, and\n provide contract and procurement training OIG recommended that HUD require\n to both the board and Authority officials. the Authority to (1) collect the more than\n (Audit Report: 2006-LA-1017) $395,000 or current balance owed to the\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b general fund account and repay the low-\n income public housing reserve the amounts\n HUD OIG reviewed the Housing collected, (2) pursue terminating the loan\n Authority of the City of Macon\xe2\x80\x99s guarantees so the contract collateral used to\n administration of its housing development guarantee the unpaid loan balances of\n activities as part of its audit of HUD\xe2\x80\x99s $125,000 will not be at risk, (3) justify the\n oversight of public housing agency necessity and reasonableness of the\n development activities with related payments made for the consultant\xe2\x80\x99s contract\n\n\n42 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cand reimburse any amount that cannot be accordance with applicable HUD\nsupported from nonfederal funds, and (4) requirements.\nterminate or amend the consultant\xe2\x80\x99s contract\nin accordance with applicable federal The Authority did not properly allocate\nrequirements. (Audit Report: 2006-AT- almost $60,000 in salary and benefit costs to\n1008) its nonfederal housing developments. It also\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b did not always follow federal procurement\n requirements when awarding contracts. In\n HUD OIG audited the Housing addition, it made some incorrect housing\nAuthority of the City of North Charleston\xe2\x80\x99s, assistance payments and did not settle\nNorth Charleston, SC, implementation of a almost $62,000 in interfund balances due its\nHUD Section 5(h) homeownership program low-rent public housing fund from other\nto determine whether the Authority HUD programs in a timely manner.\nadministered its capital funding for the\nOakleaf project in accordance with HUD OIG recommended that HUD require\nprogram requirements for financial the Authority to provide adequate\nmanagement and reasonableness and documentation to support almost $60,000 in\nnecessity of expenditures and whether the questioned salary and benefit costs or\nproject was adequately progressing toward reimburse its public housing program from\naccomplishing its homeownership objective. nonfederal sources, reduce the amount of\n housing assistance payments by the more\n The Authority inappropriately pledged than $5,000 overpayment on the Authority\xe2\x80\x99s\npublic housing program funds to secure a next Section 8 year-end settlement\n$400,000 commercial bank loan for real statement, reimburse applicable tenants\nestate improvements at Oakleaf. In almost $800 for housing assistance\naddition, the Authority\xe2\x80\x99s noncompliance underpayments, and repay its low-rent\nwith program requirements and untimely public housing fund almost $62,000 from its\nplanning caused delays in its Oakleaf other HUD programs. OIG also\nhomeownership program. The delays recommended that the Authority provide\nhampered the Authority\xe2\x80\x99s ability to provide adequate documentation to justify its\ntimely homeownership opportunities to awarding of four contracts or repay almost\nlow-income individuals and families. $85,000 or the amount currently expended\n under the contracts from nonfederal funds\n OIG recommended that the HUD and create and implement adequate internal\nensure that the Authority obtains prior controls to ensure that it fully complies with\napproval from HUD before entering into any HUD and other federal requirements.\nfuture contract or agreement that obligates (Audit Report: 2006-PH-1011)\nHUD funds to secure debt and require the \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nAuthority to provide a reasonable plan for\ncompleting the project and selling the units HUD OIG reviewed the development\nand properly assess and document activities of the Columbus Housing\nhomebuyers\xe2\x80\x99 progress and related time Authority, Columbus, NE, to determine\nextension. (Audit Report: 2006-AT-1013) whether it spent or encumbered HUD assets\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b for development activities without HUD\n approval.\n HUD OIG audited the Hampton\nRedevelopment and Housing Authority, The Authority inappropriately spent\nHampton, VA, to determine whether the more than $204,000 in public housing funds\nAuthority carried out its operations in to develop a non-HUD multifamily\n housing development. It also improperly\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 43\n\x0c encumbered its public housing assets when payments identified, and (3) implement\n it signed loan documents containing setoff adequate procedures and controls to correct\n provisions that allowed the bank to take the cited weaknesses. (Audit Report: 2006-\n Authority bank account funds in the event CH-1016)\n of default on the loans. The Authority \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n defaulted on the loans, and the bank seized\n more than $88,000 in public housing funds. HUD OIG audited the Orange City\n Housing Authority, Orange, NJ, regarding\n OIG recommended that HUD require its payments to and on behalf of the City of\n the Authority to repay its public housing Orange and the write-off of an account\n program from nonfederal sources, continue receivable from the City. The objective was\n to pursue recovery of the funds seized by to determine whether payments to the City\n the bank, and ensure that no additional for street lighting and a write-off of an\n HUD funds are used for nonfederal account receivable from the City were\n purposes without HUD approval. (Audit proper.\n Report: 2006-KC-1013)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b The Authority paid for street lighting\n expenses, which should have been furnished\n HUD OIG audited the Pickaway by the City at no cost to the Authority. It\n Metropolitan Housing Authority\xe2\x80\x99s, also wrote off an account receivable\n Circleville, OH, activities with its related pertaining to the cost of the lights without\n nonprofit organization because the obtaining board approval. As a result, the\n Authority was identified as having high-risk Authority paid for the City\xe2\x80\x99s street lighting\n indicators of nonprofit development activity. costs and was deprived of funds from a more\n The Authority improperly loaned nearly than $156,000 receivable, which could be\n $256,000 in 5(h) Homeownership Plan used to pay for necessary operating\n (program) sales proceeds to its nonprofit, expenses if collected.\n Building Affordable Housing Corporation.\n The two loans occurred without HUD OIG recommended that HUD instruct\n approval and did not follow federal the Authority to record an account receivable\n requirements regarding the use of the for the more than $156,000 due from the City\n program proceeds. The Authority\xe2\x80\x99s and notify the City to pay for street lighting\n program also lost more than $60,000 in costs. (Audit Report: 2006-NY-1011)\n interest income that would have been \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n realized if the proceeds had been invested.\n Further, the Authority paid more than HUD OIG reviewed the development\n $22,000 in expenses that would not have activities of the Columbus Housing\n been incurred if it had conducted the Authority, Columbus, NE. The Authority\n Corporation\xe2\x80\x99s development activities. The inappropriately spent more than $62,000 in\n Corporation used nearly $2,400 in program public housing funds to operate Crown\n proceeds to pay legal expenses related to its Villa, a non-HUD multifamily development.\n development activities that were not It also inappropriately signed Crown Villa\n adequately supported by detailed invoices. loan documents that contained setoff\n provisions allowing the bank to take\n OIG recommended that HUD require Authority deposits in the event of default.\n the Authority to (1) reimburse its program The Authority defaulted, and the bank\n from nonfederal funds for the improper seized more than $88,000 in public housing\n use of program funds, (2) provide funds to satisfy the defaulted loans. The\n documentation or reimburse its program Authority still owes nearly $112,000 on a\n from nonfederal funds for the unsupported remaining loan. It is now at significant risk\n\n\n44 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cof being unable to continue administering to pay entertainment expenses for its\nHUD housing programs. employees and residents, more than $1,000\n to pay travel expenses, and more than $150\n OIG recommended that HUD require to pay bereavement expenses. The\nthe Authority to (1) repay its public housing complainant\xe2\x80\x99s other allegations were not\nprogram from nonfederal sources, (2) ensure substantiated by the review.\nthat no additional HUD funds are used for\nnonfederal activities without prior HUD OIG recommended that HUD require\napproval, (3) terminate the bank agreement the Authority to (1) support that the use of\nthat is encumbering public housing funds, operating funds for legal services was\nand (4) implement controls to protect federal reasonable or reimburse its operating fund\nfunds. OIG also recommended that HUD from nonfederal funds for the applicable\nimpose administrative sanctions against the amount, (2) implement procedures and\nAuthority, its former executive director, and controls to ensure that it follows HUD\xe2\x80\x99s\nmembers of its board of commissioners for requirements and/or the Authority\xe2\x80\x99s\nplacing the Authority in its current position. procurement procedures manual when\n(Audit Report: 2006-KC-1014) procuring services and using operating\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b funds, (3) submit its legal services contracts\n to HUD for review and approval before\n HUD OIG audited the public housing disbursing additional HUD funds for legal\nprogram of the Youngstown Metropolitan services, and (4) review its use of operating\nHousing Authority in Youngstown, OH, funds to ensure that funds were used for\nbased on a citizen\xe2\x80\x99s complaint to the hotline. allowable expenses. If operating funds were\nThe complainant alleged that the Authority\xe2\x80\x99s used to pay inappropriate expenses, the\nexecutive director (1) ordered Authority Authority should reimburse its operating\npersonnel to purchase her a new sport utility fund from nonfederal funds as appropriate.\nvehicle for her personal use, (2) failed to (Audit Report: 2006-CH-1009)\nfollow HUD\xe2\x80\x99s and the Authority\xe2\x80\x99s \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nprocurement policies, (3) used the\nAuthority\xe2\x80\x99s employees for personal services HUD OIG audited the Housing\nduring duty hours, (4) used the Authority\xe2\x80\x99s Authority of Lawrence County, KY, to\nequipment for her own and others\xe2\x80\x99 personal determine whether it managed its\nuse, and (5) tampered with the Authority\xe2\x80\x99s procurement and financial management\nrecords. OIG\xe2\x80\x99s objectives were to determine systems in accordance with HUD\nwhether the complainant\xe2\x80\x99s allegations were requirements. The Authority spent almost\nsubstantiated and whether the Authority $72,000 for questionable purchases and\nused HUD funds in accordance with travel expenses. HUD and the Authority\napplicable requirements. have entered into an improvement plan and\n memorandum of agreement to address\n The Authority did not follow HUD\xe2\x80\x99s inefficiencies in the Authority\xe2\x80\x99s operations,\nrequirements for full and open competition but additional actions are needed.\nand its procurement procedures manual\nregarding the procurement of legal and OIG recommended that HUD (1)\nhousing maintenance training services require the Authority to provide support for\ntotaling almost $100,000 from July 2004 almost $72,000 in questionable costs or repay\nthrough January 2006. In addition, it did any ineligible or unsupported amounts from\nnot follow federal requirements regarding nonfederal funds; (2) revise the\nits use of almost $4,000 in public housing improvement plan and memorandum of\noperating funds from May 2004 through agreement with the Authority to include\nSeptember 2005. It used more than $2,000 actions to ensure that the Authority\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 45\n\x0c adequately segregates its accounts payable operating subsidy to exclude ineligible units\n processes, provides adequate supervisory from April 1, 2003, to December 31, 2004, and\n oversight of credit card purchases and travel (7) discontinue requesting subsidies for\n advances, and complies with its housing units that are not eligible. By\n procurement policies and federal implementing these recommendations, the\n procurement regulations; and (3) reevaluate Authority can put nearly $1.9 million to\n the corrective actions at a later date to better use over a 1-year period. (Audit\n determine whether the actions were Report: 2006-PH-1014)\n appropriate. (Audit Report: 2006-AT-1017)\n Movin\n Moving to W\n ving ork (MTW)\n Work\n Lo\n Loww -Rent Maintenance Demostration Pr\n Proogram\n Pr\n Proogram\n HUD OIG audited the process HUD\n HUD OIG audited the Housing used to admit the Housing Authority of\n Authority of the City of McKeesport\xe2\x80\x99s, Baltimore City, Baltimore, MD, into its\n McKeesport, PA, management of its low- MTW Demonstration program to determine\n rent maintenance program. The Authority whether HUD followed applicable statutory\n received operating subsidies for ineligible requirements when it admitted the\n units and did not prevent conflict-of-interest Authority into the program.\n situations with its vendors. Additionally, it\n did not provide adequate management In violation of the statute, HUD\n oversight and control and did not executed an MTW agreement with the\n implement adequate policies and Authority without requiring it to provide for\n procedures to ensure that its maintenance citizen participation through a public\n employees completed vacant work orders as hearing or other means and by not requiring\n required. it to develop a plan that considered\n comments from the public hearing or any\n OIG recommended that the Authority other public comments on the proposed\n (1) repay the program more than $90,000 program. In addition, HUD did not follow\n from nonfederal funds for the ineligible its normal award-making process because\n expenditures resulting from the prohibited it allowed the Authority to submit its\n conflict-of-interest situations with its expression of interest 31 months past the\n vendors, (2) implement controls and HUD-established deadline and did not\n procedures to prevent and resolve conflict- require it to demonstrate its ability to\n of-interest situations with its vendors, (3) properly administer HUD funds.\n provide adequate management oversight\n and control to ensure that maintenance OIG recommended that HUD obtain an\n employees document and complete vacant opinion from its Office of General Counsel\n unit work orders in a timely manner, (4) to determine whether it has sufficient legal\n bring its maintenance staffing levels in line grounds to nullify the Authority\xe2\x80\x99s MTW\n with HUD guidelines or properly justify agreement and if so, nullify the agreement.\n why the additional maintenance personnel If the agreement is nullified, OIG\n are needed, (5) implement policies and recommended that HUD reinstate\n procedures to justify hiring maintenance recommendations from its prior audits of the\n contractors to provide services that should Authority\xe2\x80\x99s Section 8 certificate and voucher\n be performed by the Authority\xe2\x80\x99s programs, Audit Reports 2005-PH-1004 and\n maintenance personnel, (6) repay HUD 2001-PH-1003. HUD should recapture $25.1\n ineligible amounts from nonfederal funds million from the Authority\xe2\x80\x99s Section 8\n after HUD recalculates the Authority\xe2\x80\x99s reserve account that the Authority carried\n\n\n46 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c Public Housing Operatin\n Housing g\n Operating\n Fund Pr ogram\n Pro\n HUD OIG audited HUD\xe2\x80\x99s phase-down\n for demolition add-on funding calculations\n for the Public Housing Operating Fund\n program, based on results of a prior audit\n that indicated HUD did not always obtain\n adequate supporting documentation from\n PHAs before approving requests for phase-\n down funding. The objective was to\n determine whether HUD obtained and\n adequately reviewed the supporting\n documentation for the $74.3 million in\n approved phase-down funding for FYs 2004\n and 2005.\n\n HUD did not always obtain\n and adequately review supporting\n documentation before approving $42 million\n in phase-down funding. Each field office\n implemented its own procedures for the\n review of phase-down funding requests in\n the absence of formal guidance from HUD.\n Without this guidance, the field offices\n interpreted and applied phase-down for\n demolition regulations inconsistently. As a\n result, HUD funded more than $15.1 million\n in unsupported and $20.6 million in\n ineligible phase-down funding requests for\n FYs 2004 and 2005.\n\n OIG recommended that HUD develop\n formal guidance and review procedures for\n approving requests for the phase-down for\n Copyright, 2006. Baltimore Sun -\n Baltimore, MD. Reprinted with permission. demolition funding, obtain and review\n support for the $15.1 million in unsupported\n phase-down funding requests for FYs 2004\nover to the MTW program. HUD should and 2005, determine the correct amount of\nalso establish policies and procedures phase-down funding received, recover the\nrequiring it to obtain a legal opinion from $20.6 million in ineligible phase-down\nits Office of General Counsel when it does funding paid to public housing agencies in\nnot follow the normal award-making FYs 2004 and 2005, and obtain and review\nprocess in approving housing agencies\xe2\x80\x99 complete support for phase-down funding\nparticipation in program initiatives. (Audit requests for FY 2006. (Audit Report: 2006-\nReport: 2006-PH-0002) BO-0001)\n\n\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 47\n\x0c Con\n Convver sion of Lo\n ersion w-Rent\n Low-Rent\n Units to Housin g Choice\n Housing\n Vouc her Pr\n oucher ogram\n Pro\n HUD OIG reviewed HUD\xe2\x80\x99s oversight of\n PHAs\xe2\x80\x99 compliance with the mandatory\n conversion of low-income housing units to\n the Section 8 Housing Choice Voucher\n program to determine whether HUD had\n adequate oversight to ensure that Section\n 202 of the Omnibus Consolidated\n Rescissions and Appropriations Act of 1996\n was followed by PHAs regarding the\n mandatory conversion of low-income\n housing units.\n\n Of the 28 public housing developments\n reviewed, all developments had either\n completed or were in the process of meeting\n the mandatory conversion requirements\n except for the Detroit Housing\n Commission\xe2\x80\x99s Frederick Douglass\n development. HUD approved the partial\n demolition of the development in July 2001\n based in part on its high vacancy rate. As of\n March 22, 2006, partial demolition had\n occurred; however, the development was\n still not meeting the mandatory conversion\n requirements, and it had a vacancy rate of\n 43 percent.\n\n OIG recommended that HUD\n implement additional procedures and\n controls to ensure that all public housing\n authorities comply with Section 202 and\n HUD\xe2\x80\x99s regulations regarding the mandatory\n conversion of low-income housing units and\n initiate appropriate action to ensure that the\n Frederick Douglass development complies\n with Section 202\xe2\x80\x99s requirements and HUD\xe2\x80\x99s\n regulations regarding mandatory\n conversion. (Audit Report: 2006-CH-0002)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n48 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c Investi\n Inv gations\n estig Some investigations discussed in this\n report were conducted by OIG or jointly\n During this reporting period, OIG with federal, state, and local law\n opened 388 investigation cases and closed enforcement agencies. The results of\n 361 cases in the Public and Indian housing various significant investigations are\n program area. Judicial action taken on these described below.\n cases during the period included $7,855,917\n in investigative recoveries, $14,559,970 in Public Housing Authority\n Housing\n funds put to better use, 516 indictments/\n informations, 298 convictions/pleas/pretrial Theft/Embe zzlement\n heft/Embezzlement\n diversions, 735 administrative actions, 10\n civil actions, 7 personnel actions, and 1,798 Raymond Asselin, Sr., the former\n arrests. executive director of Springfield Housing\n Authority (SHA); his wife Janet Asselin; his\n Char\n Chartt 3.2: Public and Indian Housing\n Housing sons James Asselin, Raymond Asselin, Jr.,\n Reco\n Recovveries Christopher P. Asselin (formerly 9 th\n False Hampden District Representative for the\n Embezzlement Statements\n 2% ($137,118) 11% ($802,983)\n Mail Fraud State of Massachusetts), and Joseph Asselin;\n Other 3%\n 3% ($191,801) ($199,000) Arthur G. Sotirion, the former deputy\n executive director of SHA; and former SHA\n Public\n Corruption contractors John Spano, doing business as\n 13% Valley Floor Covering, Inc., and John P.\n ($1,073,820)\n Corcoran, doing business as Corcoran\nSection 8, Tenant Fraud Section 8, Tenant Fraud\n 3%\n Plumbing, each pled guilty in U.S. District\n 58% ($4,483,422) Landlord Fraud\n 7% ($528,731) ($221,223) Court, Springfield, MA, to numerous\n Total Recoveries $7,855,917\n charges including racketeering, filing false\n\n\n A Look Bac\n Backk ffor\n or the Year\n Year\n Char\n Chartt 3.3: Per centa\n Percenta g\n centage of OIG Public and Indian Housing Closed In\n Housing vesti\n Inv gation Cases\n estig Cases,,\n Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 7%\n Chicago\n Region 7-8\n 12% Region 2\n Kansas City\n 15% New York\n 9%\n\n\n\n\n Region 3\n Philadelphia\n 17%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 16% Atlanta\n Region 6 10%\n Fort Worth\n 14%\n\n\n\n HUD\xe2\x80\x99s Public and Indian Housing Programs 49\n\x0c Copyright, 2006. The Republican - Springfield, MA. Reprinted with permission.\n\n\n federal income tax returns, conspiracy to contractor for Buffalo Municipal Housing\n commit theft against the government, Authority (BMHA), was sentenced in U.S\n conspiracy to commit receipt of gratuity, District Court, Buffalo, NY, to 6 months\n conspiracy to commit theft, conspiracy to home confinement and 18 months probation\n commit mail fraud/theft of honest services, and fined $10,000 for his earlier guilty plea\n conspiracy to commit federal bribery, to false statements to HUD. Mary K.\n conspiracy to commit wire fraud, and/or Pedlow, also known as Mary Casey\n obstruction of justice. The above defendants Ackerman, an employee of Ackerman\n and other conspirators assisted Raymond Mechanical Services, Inc., pled guilty to one\n Asselin, Sr., the former executive director at count of submitting false documents to\n SHA, in embezzling more than $3.5 million HUD. Both Ackerman and Pedlow falsely\n from SHA for the personal benefit of certified their qualifications as a Minority\n himself, family members, and others. The Business Enterprise (MBE) and their\n SHA funds were embezzled in the form of utilization and distribution of contract work\n money and items, including home to an actual MBE company on BMHA\n improvements, household goods, projects. As a result, Ackerman illegally\n construction work, automotive repairs, and obtained approximately $1.75 million in\n contributions to Christopher Asselin\xe2\x80\x99s BMHA contracts.\n political campaign. As part of a settlement, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n 12 defendants agreed to collectively\n liquidate six properties, including a $1.2 LaToya Cotton, a former Michigan State\n million house on Cape Cod, a time-share Housing Development Authority (MSHDA)\n condo in Aruba, a 23-foot Chaparral boat, a contractor, was sentenced in U.S. District\n BMW automobile, and $243,650 in cash Court, Detroit, MI, to 41 months incarceration\n previously seized. and 3 years probation and ordered to pay\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b MSHDA $1,052,701 restitution for her earlier\n guilty plea to theft and embezzlement. Cotton,\n Eric Ackerman, President of Ackerman doing business as Washtenaw Payee Services,\n Mechanical Services, Inc., a plumbing created false tenant files and inspections to\n\n50 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cdivert and personally use MSHDA funds for to report the stolen funds as income on his\n10 years. federal income tax returns.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n William Moorehead, doing business as Livia Alicea-Rios, the former executive\nWilliam Moorehead and Associates (WMA), manager of San Juan\xe2\x80\x99s Department of\npled guilty in U.S. District Court, Chicago, Housing and Community Development\nIL, to one count of wire fraud. Moorehead, (SJDHCD) Section 8 Division; Jeffrey Font-\na property manager for many housing Ruiz, a former SJDHCD landlord; and\nauthorities and privately owned Section 8 Shemika Ortiz-Aquino, a former SJDHCD\ndevelopments, created fraudulent records Section 8 tenant, were indicted in U.S.\nand money transfers to hide embezzled and District Court, San Juan, PR, on conspiracy\nmisused HUD funds. In addition, to corruptly solicit monies concerning\nMoorehead directed former WMA programs receiving federal funds, program\nemployees Patricia Taylor and Brian fraud, and theft of government funds. In\nTownsend to create false bank records and addition to the defendants above, Lorna\ndraw checks on bank accounts containing Yeampierre-Adorno, Gladys Rosario-Santel,\ninsufficient funds; both Taylor and Teresa Fernandez-Maldonado, and 29\nTownsend previously pled guilty to one SJDHCD Section 8 voucher tenants were\ncount of wire fraud. As a result of their charged with one count of conspiracy to\nactions, HUD realized losses of $995,000. corruptly solicit monies concerning\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b programs receiving federal funds. From\n March 2004 through March 2005, Alicea-\n Ronald McCoy, a Philadelphia Housing Rios, Font-Ruiz, and Ortiz-Aquino allegedly\nAuthority (PHA) contractor doing business as orchestrated a fraud scheme using\nABC Construction, was sentenced in Yeampierre-Adorno, Rosario-Santel, and\nPhiladelphia Court of Common Pleas, Fernandez-Maldonado as \xe2\x80\x9crunners\xe2\x80\x9d to\nPhiladelphia, PA, to 1 to 5 years in prison for receive payments from SJDHCD Section 8\nhis earlier guilty plea to theft by deception, applicants. The SJDHCD Section 8\nbid rigging, and conspiracy. McCoy applicants allegedly provided $800 to $1,500\nfraudulently billed PHA subsidiary to obtain SJDHCD Section 8 vouchers or\nPhiladelphia Housing Development move up on the SJDHCD Section 8 waiting\nCorporation for rehabilitation work he failed list.\nto complete at a low-income shelter. As a \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\nresult, HUD realized losses of $156,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Marysol Morales, the former Avon\n Housing Authority (AHA) Section 8\n Eric Hurt, a former accounting manager coordinator, was sentenced in U.S. District\nat Hoboken Housing Authority (HHA), pled Court, Boston, MA, to 70 months\nguilty in U.S. District Court, Newark, NJ, incarceration and 2 years supervised release\nto theft concerning programs receiving and ordered to pay AHA and three victims\nfederal funds and federal income tax $194,100 restitution for her earlier conviction\nviolations. Hurt, while employed as the on false statements and corrupt receipt of\naccounting manager at HHA, embezzled payments by an agent of a federally funded\n$111,083 in HHA funds by issuing 34 checks local government entity. From January to\nfrom the HHA general operating fund to December 2004, Morales accepted at least\nhimself without authorization, deposited 31 $31,000 for selling more than 100 AHA\nHHA checks into his personal bank Section 8 vouchers valued in excess of $1.3\naccounts, cashed the remaining three HHA million. As a result, HUD realized losses of\nchecks, used the misappropriated HHA $387,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nfunds for personal expenditures, and failed\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 51\n\x0c Thomas Herrera, the former executive\n director of Pueblo de Cochita Housing\n Authority (PDCHA), was sentenced in U.S.\n District Court, Albuquerque, NM, to 3 years\n probation and ordered to pay PDCHA\n $78,448 restitution for his earlier guilty plea\n to embezzlement from an Indian tribal\n organization. From February to November\n 2003, Herrera forged PDCHA board\n members\xe2\x80\x99 signatures on unauthorized\n PDCHA checks he issued to himself,\n endorsed and cashed the PDCHA checks,\n and used the embezzled PDCHA funds for\n personal expenses. As a result, HUD\n realized a loss of $78,448.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Serena Parker, a former Greensboro\n Housing Authority (GHA) intake specialist,\n and Vivian Bailey, a fabricated GHA landlord,\n were sentenced in U.S. District Court,\n Greensboro, NC, for their earlier guilty pleas\n to mail fraud and aiding and abetting. Parker\n was sentenced to 1 month incarceration, 5\n months home detention, and 3 years\n supervised release and ordered to pay GHA\n $74,322 restitution; Bailey was sentenced to 4\n months home detention and 4 years probation\n and ordered to pay GHA $19,861 restitution.\n Parker accessed GHA\xe2\x80\x99s computer system,\n illegally added Bailey and previously indicted\n Teresa Thomas as GHA landlords, and caused\n the mailing of 48 fraudulent housing\n assistance payment checks valued at more Copyright, 2006. New Haven Register- New\n than $70,000 to Bailey and Thomas. As a result, Haven, CT. Reprinted with permission.\n HUD realized a loss of $74,322.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and used HANH employees to complete the\n contract work.\n Corey Newton and Gregory Webb, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n former employees of Housing Authority of\n New Haven (HANH) and doing business Barbara Rawls-Ivy, the former executive\n as Unlimited Horizons, each pled guilty in director of Alliance for Strong Communities\n U.S. District Court, New Haven, CT, to (ASC), a Housing Authority for the City of\n conspiring to make false statements and New Haven (HANH) nonprofit organization\n misapplying money belonging to a local providing social services to HANH public\n government entity receiving federal housing residents, pled guilty in U.S. District\n funds. Newton and Webb created a Court, New Haven, CT, to an information\n fictitious company, awarded themselves charging her with theft from a program\n approximately $54,000 in HANH receiving federal funds. From 2001 through\n maintenance and rehabilitation contracts, 2003, while serving as the Police\n\n\n52 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cCommissioner for the City of New Haven personal trips. HUD\xe2\x80\x99s loss is estimated at\nand holding an elected position on the New more than $24,000.\nHaven Board of Aldermen, Rawls-Ivy \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nprepared, endorsed, and negotiated ASC\nchecks totaling more than $49,000 for her Chris Emeka Ayoka, a former\npersonal use. Minneapolis Public Housing Authority\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b (MPHA) Section 8 inspector, was indicted in\n Hennepin County Court, Minneapolis, MN,\n Carsereena Red Dog, a former on one count of theft by swindle. Ayoka\naccounting specialist with Opportunities, allegedly worked as a baggage handler at the\nInc., a nonprofit organization administering Minneapolis-St. Paul International Airport\na HUD Section 8 housing program, and her while claiming he conducted and received\nhusband Leslie Red Dog were sentenced in payment for MPHA Section 8 residential\nU.S. District Court, Great Falls, MT, for their inspections. HUD\xe2\x80\x99s loss is estimated at\nearlier guilty pleas to false statements. $15,000.\nCarsereena and Leslie Red Dog were each \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nsentenced to 6 months home detention and\n5 years probation and ordered to pay the Waconda Nolan, a former Internal\nMontana Department of Commerce $32,455 Revenue Service (IRS) employee, was\nrestitution jointly and severally. Carsereena sentenced in U.S. District Court, Atlanta,\nand Leslie Red Dog failed to report Leslie\xe2\x80\x99s GA, to 5 years probation and 40 hours of\nincome on housing certifications and community service and ordered to pay\nobtained $32,455 in housing assistance Atlanta Housing Authority (AHA) $13,629\npayments they were not entitled to receive. restitution for her previous guilty plea to\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b false statements. Nolan provided false\n verifications of employment on behalf of\n Walter John, a former Virgin Island others to AHA.\nHousing Authority (VIHA) procurement \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nspecialist, and George Flemming, a former\nVIHA contractor and owner of Mr. G\xe2\x80\x99s Frederick Demps, the former Housing\nMaintenance, were convicted in U.S. District Authority of the City of Austin (HACA)\nCourt, St. Croix, VI, of conspiracy, wire housing manager, was indicted in U.S.\nfraud, and federal program fraud. From District Court, Austin, TX, on one count of\nJune 1998 to September 1999, John received theft from a federally funded program.\nmore than $30,000 from Flemming for Demps allegedly embezzled tenant rents\npreferential treatment in securing a $1.5 and altered HACA accounting documents\nmillion VIHA public housing rehabilitation to hide missing HACA funds. As a result,\ncontract and expedited payments. As a HUD realized a loss of $7,750.\nresult, HUD\xe2\x80\x99s loss is estimated at $30,000. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Guy Dill Copes, the former executive\n Toni Hart, the former Lawrence County director of Housing Authority of the Town\nHousing Authority (LCHA) executive of Beaufort (HATB), was arrested after a\ndirector, was indicted in U.S. District Court, complaint was filed in Carteret County\nLawrenceville, IL, on two counts of District Court, Beaufort, NC, charging him\nembezzlement and one count each of wire with embezzlement and larceny by an\nfraud and false statements to a federal agent. employee. Copes allegedly purchased tools\nHart allegedly used a LCHA credit card to and equipment with HATB funds for his\npurchase clothing and jewelry, acquire cash personal use. HUD\xe2\x80\x99s loss is estimated\nthrough ATM withdrawals, and pay for to exceed $5,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 53\n\x0c Daniel M. McNamee, a former instruments. Moor allegedly falsified her\n Springfield Housing Authority (SHA) LHA employment application by using a\n maintenance supervisor, was arrested after Social Security number (SSN) assigned to\n his indictment in U.S. District Court, another person to conceal her criminal\n Springfield, MA, on obstruction of due history and obtain employment with LHA.\n administration of justice and filing a false Moor obtained LHA employment and an\n federal income tax return. McNamee annual salary of $74,880.\n allegedly caused SHA to purchase and pay \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n $1,720 for a boiler, hot water tank, and\n baseboard heating components installed in David Gomez Serena, the former\n the Rhode Island residence of Francis executive director of Yolo County Housing\n Keough, the previously indicted former Authority (YCHA), was indicted in County\n director of Friends of the Homeless, a HUD- of Yolo Superior Court, Woodland, CA, on\n funded nonprofit. numerous counts of making false and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b fraudulent insurance claims, preparing false\n statements concerning insurance claims,\n Benita James and Sean Gray, former and grand theft exceeding $400. Serena\n Housing Authority of the City of New allegedly claimed his girlfriend and her\n Haven (HANH) employees, were indicted dependent children as his dependents to\n in Superior Court, New Haven, CT, on collect medical insurance benefits provided\n charges of conspiracy to commit identity by YCHA.\n theft, larceny, conspiracy to commit larceny, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and trafficking in personal identifying\n information. James, while employed at Bertha G. Muniz, the former Bayard\n HANH, allegedly accessed HANH Housing Authority (BHA) executive\n computer databases, obtained identifying director, was indicted in Grant County\n information on another HANH employee/ Court, Silver City, NM, on one count of\n Section 8 landlord, and sold the embezzlement. Muniz allegedly authorized\n identification information to Gray. Gray, BHA maintenance personnel to purchase\n using the stolen identification information materials, build a covered porch and\n he purchased from James, allegedly opened elevated walkway, and install security lights\n residential and cellular telephone accounts at her personal residence. HUD\xe2\x80\x99s loss is\n in the name of the victim. In addition to her estimated at $748.\n indictment above, James was sentenced in\n U.S. District Court, Bridgeport, CT, to 6 Rental Assistance Fraud\n months home confinement and 3 years\n probation and fined $3,000 for her earlier\n guilty plea to federal program bribery. As a result of \xe2\x80\x9cOperation Eight,\xe2\x80\x9d\n While employed at HANH, James accepted Eliminating Ineligible Grantees Housing\n cash and stolen items in exchange for Task Force (Phase II), 14 Chicago Housing\n moving HANH Section 8 applicants to the Authority (CHA) or Cook County Housing\n top of the Section 8 waiting list. Authority (CCHA) Housing Choice Voucher\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Program participants, and a CHA\n contractor were indicted in U.S. District\n Court, Chicago, IL, on various counts of false\n Phyllis Marie Moor, director of Land\n statements, mail fraud, wire fraud, and\n Acquisitions for Lakeland Housing\n embezzlement. The above defendants\n Authority (LHA), was charged in an\n allegedly failed to report ownership of more\n information filed in Polk County Tenth\n than $1 million in real estate, omitted income\n Judicial Circuit Court, Bartow, FL, with one\n on CHA/CCHA annual certifications,\n count each of forgery and uttering forged\n diverted fictitious landlord checks, or\n\n54 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c CMHA. CMHA Section 8 tenants and\n landlords indicted allegedly failed to report\n proper annual income, tenants with\n ownership in Section 8 properties, and/or\n landlords residing in Section 8 units with\n tenants. HUD\xe2\x80\x99s loss is estimated at $422,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Miami Dade Housing Agency (MDHA)\n Section 8 tenants Andrea Greene, Revenue\n Bien Aime, and Sheree Dozier were indicted\n in U.S. District Court, Miami, FL, on\n numerous counts of theft of government\n funds, false statements to HUD, or\n conspiracy to defraud HUD for allegedly\n failing to report income, true household\n composition, ownership of MDHA\n subsidized units, and/or receipt of housing\n Copyright, 2006. Chicago Sun Times - Chicago, assistance from other housing authorities on\n IL. Reprinted with permission. annual MDHA certifications. Delores\n Murat, Rosa Colon and her husband Luis\n Zayas, and Liliana Barranco each pled guilty\ncollected housing assistance payments on\n to theft of government funds, conspiracy,\nproperty they did not own. In addition to\n and/or false statements for failing to report\ncriminal charges, federal civil complaints for\n employment, income, or ownership of or\nfalse claims, payment by mistake, and\n unauthorized residency in MDHA\nunjust enrichment were filed against six of\n subsidized units on MDHA certifications.\nthe above subjects. HUD\xe2\x80\x99s loss is estimated\n Former MDHA tenants sentenced for their\nto exceed $600,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n earlier guilty pleas to theft of government\n funds, false statements, and/or conspiracy\n As part of \xe2\x80\x9cOperation Deep Pockets,\xe2\x80\x9d 19 include Quiana Adams, her spouse Anthony\nCuyahoga Metropolitan Housing Authority Boatwright, and Sharon Dixon. Adams was\n(CMHA) Section 8 tenants and four CMHA sentenced to 3 months incarceration and 7\nSection 8 landlords were indicted in Cuyahoga months home confinement; Boatwright was\nCounty Court, Cleveland, OH, on numerous sentenced to 6 months home confinement\nviolations of theft and fraud against the and ordered to pay HUD $59,327 restitution,\n jointly with Adams; and Dixon was\n\n\n\n\nCopyright, 2006. Plain Dealer, Cleveland, OH. Reprinted with permission.\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 55\n\x0c sentenced to 36 months supervised release assistance payments on behalf of vacant units,\n with 6 months electronic monitoring and failing to report income or disclose assets,\n home confinement and ordered to pay HUD subleasing units to unauthorized tenants,\n $58,822 restitution. The above MDHA allowing illegal occupants with violent\n tenants obtained more than $310,843 in criminal histories to reside in leased units, and/\n MDHA housing assistance they were not or having landlords occupying subsidized\n entitled to receive. units with tenants. HUD\xe2\x80\x99s losses are estimated\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b to exceed $500,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n In an \xe2\x80\x9cOperation Clean Sweep Phase II\xe2\x80\x9d\n press conference, HUD Secretary Alfonso SLS Management, Inc. (SLS), an India-\n Jackson announced that 49 individuals were napolis Housing Authority (IHA) Section 8\n indicted in Marion County Superior Court, landlord, pled guilty in Marion County\n Indianapolis, IN, on charges of welfare fraud Superior Court, Indianapolis, IN, to one count\n and theft. Indianapolis Housing Authority of welfare fraud. Between April and October\n (IHA) Section 8 leased and subleased tenants, 2005, SLS Management leased apartments to\n landlords, and a housing manager were new residents who were receiving Section 8\n indicted for allegedly collecting housing assistance. In doing so, SLS Management, Inc.\n\n\n\n\n Copyright, 2006. Indystar.com - Indianapolis, IN. Reprinted with permission.\n\n\n56 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cfalsely certified that the owner had not been Twelve Nazareth Housing Authority\nbarred from participating in any federally- (NHA) Section 8 recipients were charged in\nfunded housing program. As part of the plea North Hampton County Court of Common\nagreement, SLS Management, Inc. agreed to Pleas, Nazareth, PA, with theft by\nrelinquish any claim to IHA Section 8 deception or not sworn falsifications. The\npayments, pay IHA $327,640.00 and the 12 defendants allegedly failed to report\nIndianapolis Police Department $3,480.00. accurate sources or amounts of household\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b income and allegedly obtained more than\n $150,000 in NHA housing assistance benefits\n Sixteen public housing, Section 8 they were not entitled to receive.\nvoucher, or HUD-funded project-based \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nmultifamily residents of either Freeport\nHousing Authority, Rockville Center As part of a Waukegan Housing\nHousing Authority, Hempstead Department Authority (WHA) Section 8 fraud initiative,\nof Urban Renewal, Nassau County 13 WHA Section 8 tenants were arrested and\nHousing and Intergovernmental Affairs, or indicted in Lake County Circuit Court,\nWoodsedge Apartments, Hempstead, NY, Waukegan, IL, on numerous counts of theft,\nwere arrested after complaints were filed in state benefits fraud, and forgery. The indicted\nNassau County Court, Mineola, NY, WHA Section 8 tenants allegedly falsified\ncharging them with grand larceny and/or annual WHA certifications by underreporting\noffering a false instrument for filing. The income. HUD\xe2\x80\x99s loss is estimated at more than\nabove defendants allegedly failed to $140,000.\naccurately report their incomes on housing \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nassistance certifications and HUD\xe2\x80\x99s loss is\nestimated at more than $225,000. Donna James, Lyris Wolfe, Sheila\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Whittenberg, and Christine Carpenter,\n former Housing Authority of the County of\n Alonzo Freeman, Joey Hornback, Sheila San Mateo (HACSM) Housing Choice\nO\xe2\x80\x99Neal, Denneshia McCraw, Brenda McCoy, Voucher program participants, each pled\nand Bridgette Peoples, Inglewood Housing guilty to informations filed in U.S. District\nAuthority (IHA) Section 8 recipients, were Court, San Francisco, CA, charging them\ncharged in Superior Court, Inglewood, CA, with one count of defrauding HUD.\nwith numerous counts of filing a false/ Celestine Gallegos, also a former HACSM\nforged instruments, obtaining money by Housing Choice Voucher program\nfalse pretenses, grand theft, and/or fraud. participant, was sentenced to 24 months\nThe above defendants allegedly failed to probation and ordered to pay HUD $13,285\ndisclose income or assets, prior criminal restitution for her previous guilty plea\nhistories, and/or unauthorized tenants on to defrauding HUD. James, Wolfe,\nannual IHA certifications. In addition, Geno Whittenberg, Carpenter, and Gallegos each\nWilson, a former IHA Section 8 tenant was applied for and received HACSM housing\nsentenced to 3 years incarceration and assistance payments while living in San\nordered to pay IHA $49,434 restitution for Francisco Housing Authority public\nfailing to disclose his prior criminal history housing units. As a result, the above\nor conviction and registered sex offender defendants obtained $132,124 in HACSM\nstatus on IHA certifications. The above housing assistance they were not entitled to\ndefendants obtained more than $154,000 in receive.\nIHA housing assistance they were not \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nentitled to receive.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Cynthia Braxton, an IRS employee;\n Christine Hill, a U.S. Postal Service\n (USPS) employee, and seven additional\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 57\n\x0c Montgomery County Housing Authority Previously indicted Kalsoum Berro, a\n (MCHA) Housing Choice Voucher program Michigan State Housing Development\n recipients were indicted in U.S. District Authority (MSHDA) Section 8 tenant, and\n Court, Philadelphia, PA, on numerous Hassan Berro, an MSHDA Section 8 landlord,\n counts of false statements in order to obtain entered into a diversion program agreement\n federally subsidized housing benefits. in Wayne County Circuit Court, Detroit, MI.\n Braxton, Hill, and the five additional MCHA Terms of their agreement required a $35,000\n tenants allegedly failed to report income, payment to MSHDA. From 1990 , Kalsoum\n unauthorized residents, or assets on MCHA and Hassan Berro resided in the same\n certifications. HUD\xe2\x80\x99s loss is estimated to subsidized housing unit but failed to claim\n exceed $134,000. their joint residency on MSHDA tenant and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b housing assistance payment contract\n certifications. As a result, HUD realized a loss\n Linda White and Corrina Arenas, of $90,000.\n former City of Ventura Housing Authority \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n (CVHA) Section 8 tenants; Linda McClain,\n a former CVHA public housing resident; Compton Housing Authority (CHA)\n and Gloria De La Cruz, a former CVHA Section 8 tenants Christine Shena Baker and\n landlord, were each charged in Ventura Joseph Christianlee Haywood were indicted\n County Superior Court, Ventura, CA, with or pled guilty in U.S. District Court, Los\n one count of grand theft. The above Angeles, CA. Baker was indicted for making\n defendants allegedly failed to report false statements to a government agency and\n vacated CVHA subsidized units and/or fraud and false statements involving HUD\n employment, business, or rental income for allegedly failing to disclose her criminal\n on CVHA certifications and obtained history and status as a registered sex\n approximately $93,390 in CVHA housing offender on annual CHA certifications.\n assistance they were not entitled to receive. Haywood, previously convicted of rape,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b auto theft, and assault with a deadly\n\n\n\n\n Copyright, 2006. Times Herald, Philadelphia, PA. Reprinted with permission.\n\n\n58 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cweapon, pled guilty to an information (MBHP) Section 8 tenant, pled guilty in U.S.\ncharging him with one count of theft of District Court, Boston, MA, to an\ngovernment funds for failing to disclose his information charging him with false\nprior criminal history on annual CHA statements and defrauding the Social\ncertifications. Baker and Haywood obtained Security Administration (SSA). Murray-\nmore than $88,000 in CHA housing McCarthy assumed a false identity to obtain\nassistance payments they were not entitled an SSN, federal student loans, and\nto receive. CHA terminated both Baker and employment, while using his true identity\nHaywood from its rental assistance to obtain MBHP housing assistance and\nprogram. Social Security Disability Insurance benefits.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b As a result, HUD realized a loss of $72,606.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Jerome Massey, a Detroit Housing\nCommission (DHC) Section 8 landlord and Barbara Singleton, a Rochester Housing\npreviously convicted felon, was charged in Authority (RHA) Section 8 tenant, and Larry\nWayne County Circuit Court, Highland Park, Pradia, a RHA landlord, were each charged\nMI, with numerous counts of receiving in a superseding indictment filed in U.S.\nmonies under false pretenses, tax evasion, District Court, Rochester, NY, with\nidentity theft, delivery/manufacture of conspiracy to commit HUD fraud, false\nmarijuana, and under the Habitual Offender statements, theft of government funds, and\nAct. Massey allegedly used his son\xe2\x80\x99s SSN and bankruptcy fraud. Singleton and Pradia\ncollected $84,000 as a DHC landlord while allegedly conspired to collect more than\noccupying a DHC subsidized unit with a DHC $70,000 in RHA Section 8 housing assistance\nSection 8 tenant. Massey was arrested after payments when Singleton certified that\nmarijuana plants, harvested marijuana, and Pradia was her landlord and resided\nmaterials for a continued marijuana operation elsewhere on annual RHA certification and\nwere found in the DHC unit. leasing documents. In addition, Pradia filed\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b bankruptcy in November 2005 and allegedly\n failed to claim RHA Section 8 income or his\n Clifford Chambers, a Montgomery residency with Singleton on bankruptcy\nCounty Housing Opportunities documents.\nCommission (MCHOC) Section 8 recipient, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nwas sentenced in U.S. District Court,\nGreenbelt, MD, to 18 months incarceration Deonna Degraffenreid, a former City of\nand 3 years supervised release and ordered Las Vegas Housing Authority (LVHA)\nto pay MCHOC $80,912 restitution for his Section 8 tenant, pled guilty in Clark County\nearlier guilty plea to trafficking in Justice Court, Las Vegas, NV, to one count\ncounterfeit goods and theft of government of conspiracy to commit unlawful acts\nproperty. From 2000 to June 2004, Chambers concerning food stamps. Degraffenreid\nowned and operated a business selling failed to accurately report her household\ncounterfeit marked goods out of his income and composition on LVHA and\nMCHOC subsidized unit and failed to report Nevada welfare certifications and obtained\nthe business income on annual MCHOC $65,823 in LVHA housing assistance she was\ncertifications. As a result, Chambers not entitled to receive.\nobtained $80,912 in MCHOC housing \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nassistance he was not entitled to receive.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Tyeshia Borela, a former San Francisco\n Housing Authority (SFHA) Section 8 tenant,\n David Murray-McCarthy, a former pled guilty in U.S. District Court, San\nMetropolitan Boston Housing Partnership Francisco, CA, to one count of making false\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 59\n\x0c statements. Borela was sentenced to 1 social service benefits by falsifying\n month incarceration and 3 years probation household composition and income. Total\n and ordered to pay HUD $63,042 restitution. loss to the government is estimated at\n From 2002 to 2005, Borela sublet her $2,000 $250,000, including $53,000 in HUD-funded\n monthly SFHA subsidized unit to others, housing assistance payments.\n underreported her income, and falsely \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n claimed a daughter on SFHA certifications.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Esther Arias, her mother Esther Percel,\n and Gladys Cabrera, former Revere Housing\n Eugenia Cooks, a former Norwalk Authority (RHA), Boston Housing\n Housing Authority (NHA) Section 8 Authority (BHA), and/or Metropolitan\n recipient, was charged in an information Boston Housing Partnership (MBHP)\n filed in U.S. District Court, Los Angeles, CA, Section 8 tenants, and Edwin Gonzalez were\n of making false statements. From 1994 to indicted in U.S. District Court, Boston, MA,\n 2003, Cooks allegedly failed to report income on numerous counts of conspiracy, mail\n on annual NHA certifications and obtained fraud, theft and receipt of stolen mail, bank\n more than $60,000 in NHA housing fraud, identity theft, conspiracy to file false\n assistance she was not entitled to receive. claims for refunds, false and fraudulent\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b statements, and/or theft of government\n property involving HUD benefits. Arias,\n Jennifer Stevanovich, a former Andover Percel, and Cabrera allegedly conspired to\n Section 8 tenant, pled guilty in Essex County engage in an ongoing criminal enterprise,\n Superior Court, Salem, MA, to larceny over including stealing U.S. mail, using stolen\n $250 and criminal perjury. Stevanovich was identification data to open credit card and\n sentenced to 1 year house arrest and 15 years bank accounts, altering stolen checks to\n probation and ordered to pay $59,765 to obtain bank funds, depositing stolen credit\n Community Teamwork, Inc., a Section 8 card checks into bank accounts, and using\n contract administrator, and $57,790 to various identities to fraudulently obtain\n the Commonwealth of Massachusetts. RHA, BHA, or MBHP Section 8 housing\n Stevanovich, previously convicted of selling units within the greater Boston area. In\n stolen \xe2\x80\x9cVictoria\xe2\x80\x99s Secret\xe2\x80\x9d merchandise from addition, from February 1999 to April 2004,\n her subsidized housing unit, deposited Arias, Percel, and Gonzalez allegedly caused\n approximately $280,000 into eight bank the filing of more than 45 fraudulent federal\n accounts while receiving $59,765 in housing income tax returns to unlawfully collect\n benefits and $57,790 in welfare benefits she federal and state tax refunds. As a result,\n was not entitled to receive. HUD\xe2\x80\x99s loss is estimated at $51,916.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Carrie Bailey, a former Isle of Wight Nasir Javaid, a former San Francisco\n Department of Social Services (IOW) Section Housing Authority (SFHA) Section 8\n 8 tenant, and her daughter Melinda Bailey landlord, and Nancy Kharsa, a former SFHA\n were indicted in Isle of Wight Circuit Court, Section 8 tenant, were each sentenced in U.S.\n Smithfield, VA, on numerous counts of District Court, San Francisco, CA, for their\n conspiracy, making false statements, and earlier guilty pleas to making false\n obtaining money by false pretenses from statements to HUD. Javaid was sentenced\n HUD, SSA, and the Virginia Department of to 2 years probation and ordered to pay\n Social Services. Carrie and Melinda Bailey HUD $51,717 restitution; Kharsa was\n allegedly conducted a 15-year scheme to sentenced to 2 years probation and ordered\n receive housing assistance, Social Security to pay HUD $1,822 restitution, jointly and\n benefits, food stamps, Medicaid, and other severally with Javaid. From 1998 to 2002,\n\n\n60 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cCopyright, 2006. The Daily Item, Boston, MA. Reprinted with permission.\n\n Javaid and Kharsa defrauded HUD\xe2\x80\x99s Section SDHC applications and obtained $50,911 in\n 8 program by using SFHA and/or HUD SDHC housing assistance they were not\n multifamily housing assistance payments entitled to receive.\n received by Javaid, Kharsa, and Javaid\xe2\x80\x99s \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n mother to purchase two properties located\n in El Cerrito and San Francisco. As a result Shaneen Edwards and Manila McCloud,\n of their actions, HUD realized losses of City of Miami Department of Community\n $51,717. Development (MDCD) Section 8 tenants,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b each pled guilty in U.S. District Court,\n Miami, FL, to theft of government funds\n In U.S. District Court, Boston, MA, a and/or making false statements. McCloud\n $435,798 civil judgment was issued against was sentenced to 60 months supervised\n Delia Baez, a former Boston Housing release and 100 hours community service\n Authority (BHA) public housing tenant, for and ordered to pay HUD $22,695 restitution.\n obtaining housing assistance, welfare Edwards and McCloud failed to report\n benefits, food stamps, and Medicaid income on MDCD certifications and\n through false claims and fraud. Baez failed obtained $48,140 in MDCD housing\n to report her ownership of a restaurant assistance they were not entitled to receive.\n known as \xe2\x80\x9cMi Tierra\xe2\x80\x9d and a multifamily \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n property on BHA certifications. As a result,\n HUD\xe2\x80\x99s loss is estimated at $51,038. Cassaundra Samuels, a Housing\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Authority of Kansas City (HAKC) Section 8\n tenant and IRS employee, and Connie\n Shaunda Boulware, Nikki Robinson, Wooten, a HAKC Section 8 recipient, current\n Rose Long, and Silvia and Carlos Delgado, employee of USPS, and former employee of\n San Diego Housing Commission (SDHC) IRS, were charged in Jackson County\n Section 8 recipients, were charged in San District Court, Kansas City, MO, with\n Diego County Superior Court, San Diego, stealing by deceit. Samuels and Wooten\n CA, with making false statements and allegedly failed to report employment\n grand theft. Boulware, Robinson, Long, and income on HAKC certifications and\n Silvia and Carlos Delgado allegedly failed obtained $47,630 in HAKC housing\n to report income and/or employment and/ assistance they were not entitled to receive.\n or claimed nonresident dependents on \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n HUD\xe2\x80\x99s Public and Indian Housing Programs 61\n\x0c Angel Smith, also known as Angel King; on two counts of making false statements to\n Gloria Dixon; and Catrinia Parker, former HUD. From February 2002 to May 2005,\n Tampa Housing Authority (THA) Section 8 Wynn allegedly failed to report employment\n tenants, were each charged in informations or income, and claimed a nonresident\n filed in Hillsborough County Thirteenth daughter on annual GHA certifications. As\n Judicial Court, Tampa, FL, with fraud for a result, HUD\xe2\x80\x99s loss is estimated at $47,000.\n allegedly failing to report all household \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n occupants, employment, income, or other\n government benefits they received on THA Patricia Laverne Bryant, a former\n certifications. In addition, Jeanette Camille, Housing Authority of Pittsburg (HAP)\n a former THA Section 8 tenant, entered into Section 8 tenant, was charged in a complaint\n a pretrial diversion agreement (PTDA) with filed in Contra Costa County Superior Court,\n the U.S. Attorney\xe2\x80\x99s Office in Tampa, FL, Walnut Creek, CA, with grand theft, welfare\n admitting to theft of government funds. The fraud, and perjury. Bryant allegedly failed\n PTDA placed Camille on 12 months to report income or the residency of her\n supervisory probation and ordered her to boyfriend on annual HAP certifications and\n perform 60 hours of community service and obtained $46,000 in HAP housing assistance\n pay THA $5,048 restitution for failing to she was not entitled to receive.\n report income on THA certifications. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Barbara Mack, also a former THA Section 8\n tenant, was sentenced in U.S. District Court, Ernest Stevenson, a Duluth Housing\n Tampa, FL, to 5 months incarceration, 5 Redevelopment Authority (DRHA) Section\n months home detention, and 36 months 8 landlord, and Paula Petruk, also known as\n probation and ordered to pay HUD $23,455 Paula Stevenson, a DRHA Section 8 tenant,\n and SSA $38,333 restitution for her earlier were each sentenced in U.S. District Court,\n guilty plea to theft of government funds. Mack Duluth, MN, to 3 years probation and 150\n acquired and used two SSNs to obtain THA hours of community service and ordered to\n housing assistance, SSA disability benefits, pay HUD $45,441 restitution, jointly and\n and a Federal Housing Administration (FHA)- severally, for their earlier guilty pleas to\n insured mortgage and to file bankruptcy, then conspiracy. Stevenson and Petruk failed to\n failed to report employment income she disclose joint bank accounts, ownership of\n earned to THA or THA housing assistance and additional real estate, or their dual\n SSA disability benefits to the bankruptcy occupancy in a DRHA Section 8 unit on\n court. As a result, Smith, Dixon, Parker, DRHA certifications. As a result, HUD\n Camille, and Mack obtained approximately realized losses of $45,441.\n $47,465 in THA housing assistance they were \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n not entitled to receive.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Jalenska Cheatham, a Murfreesboro\n Housing Authority (MHA) Section 8 tenant,\n Johnnie Mae Brooks, a Greensboro was indicted in the U.S. District Court,\n Housing Authority (GHA) Housing Choice Nashville, TN, for making charges of false\n Voucher program participant, pled guilty in statements to HUD and theft of government\n U.S. District Court, Greensboro, NC, to funds for allegedly failing to report\n making false statements to HUD. Brooks employment income or ownership of\n failed to report income from two daycare her MHA subsidized unit on MHA\n businesses she owned and operated on GHA certifications. In addition, Marshall Graves,\n Housing Choice Voucher program a former MHA Section 8 tenant, pled guilty\n certifications. In addition, Blondine Yvonne to msking false statements to HUD for\n Wynn, a former GHA Housing Choice failing to report income on MHA\n Voucher program participant, was indicted certifications. As a result, Cheatham and\n\n\n62 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cGraves obtained $43,326 in MHA housing Regina Williams, a former Alexandria\nassistance they were not entitled to receive. Redevelopment and Housing Authority\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b (ARHA) Housing Choice Voucher program\n recipient, pled guilty in U.S. District Court,\n Amy McPherson and Delilah Property, Alexandria, VA, to an information charging\nInc., also known as Delilah Property her with making false statements. From\nServices, Inc., entered into a $254,774 civil 1996 through 2004, Williams, a Department\nsettlement with the New Hampshire United of Defense (DoD) employee, falsified her\nStates Attorney\xe2\x80\x99s Office, Concord, NH, as a income on annual ARHA certifications and\nresult of McPherson\xe2\x80\x99s previous guilty plea misused the DoD seal on letterhead\nto msking false statements. The consent letter that she submitted. As a result,\ndecree and order of payment was entered Williams obtained $36,237 in ARHA housing\non behalf of HUD, the U.S. Department of assistance she was not entitled to receive,\nHealth and Human Services (HHS), the U.S. and ARHA terminated Williams from its\nDepartment of Agriculture (USDA), SSA, rental assistance program.\nand DOJ. McPherson paid $100,000, and a \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nlien securing a Delilah Properties, Inc.,\nproperty located in Waltham, MA, for the Dena Battles, a former Clark County\nremainder of the settlement order was Housing Authority (CCHA) Section 8\nrecorded. McPherson, a former Exeter recipient, and her mother Sandra Kay\nHousing Authority (EHA) Section 8 Battles, a CCHA landlord, were each\nrecipient, received EHA Section 8 housing sentenced in U.S. District Court, Las Vegas,\nassistance on a residence she occupied and NV, for their earlier guilty pleas to\nowned under the corporate name of Delilah defrauding HUD and/or aiding and\nProperties, Inc. As a result, HUD realized a abetting. Dena Battles was sentenced to 6\nloss of $38,765. months home confinement, 3 years\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b probation, and 200 hours of community\n service; Sandra Kay Battles was sentenced\n Mary Martin, a former Saint Petersburg to 6 months home confinement with\nHousing Authority (SPHA) Section 8 tenant, electronic monitoring, 3 years probation, and\nwas sentenced in U.S. District Court, Tampa, 100 hours of community service. In\nFL, to 5 years probation with 6 months home addition, Dena and Sandra Battles entered\ndetention and ordered to pay HUD $36,997 into a settlement agreement pledging to\nrestitution for her earlier guilty plea to theft repay CCHA $36,201. From May 2002\nof government funds. Lamesha Ware, through October 2005, Dena Battles failed\nMartin\xe2\x80\x99s daughter and former Pinellas to report her mother\xe2\x80\x99s ownership of her\nCounty Housing Authority (PCHA) Section CCHA subsidized residence and claimed\n8 tenant, was indicted on one count of her out-of-state son as a resident on CCHA\nmsking false statements and possession of certifications. As a result of their actions,\nfalse papers. Martin failed to report her HUD realized a loss of $36,201.\nhusband\xe2\x80\x99s income and claimed her daughter \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nLamesha Ware as a resident of her SPHA\nunit while Ware received Section 8 housing Robert Askew III, a former Oakland\nassistance from PCHA. As a result, Martin Housing Authority (OHA) Section 8 tenant,\nobtained approximately $36,997 in SPHA pled guilty in U.S. District Court, Oakland,\nhousing assistance benefits she was not CA, to one count of mail fraud. From 1998\nentitled to receive and aided Ware in to 2003, Askew III failed to report his\ndefrauding PCHA of $16,900. employment income or ownership of two\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b houses on OHA annual certifications. Under\n a plea agreement with the U. S. Attorney\xe2\x80\x99s\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 63\n\x0c Office, Askew III agreed to pay HUD, SSA, assistance they were not entitled to receive.\n and HHS $140,380 restitution for housing CCHA removed Fianko and Sekyere from\n and other social benefits he obtained but was its rental assistance program.\n not entitled to receive. HUD\xe2\x80\x99s loss is \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n estimated at $35,584.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Sonciera Dejarnette Bomar-Royal, a\n former Housing Authority of the City of\n Darlynn Cooper, a former Santa Monica Napa (HACN) Housing Choice Voucher\n Housing Authority (SMHA) Section 8 program participant, was charged in Napa\n recipient, was charged in Superior Court, County Superior Court, Napa, CA, with\n Santa Monica, CA, with grand theft and perjury by false affirmation for aid, aid by\n filing a false/forged instrument. From July misrepresentation over $400, and grand theft\n 2005 to March 2006, Cooper allegedly failed of personal property. Bomar-Royal allegedly\n to disclose income she earned on SMHA claimed her nonresident son on HACN\n certifications and obtained $34,493 in SMHA certifications and obtained $25,020 in HACN\n housing assistance she was not entitled to housing assistance she was not entitled to\n receive. SMHA terminated Cooper from its receive.\n rental assistance program. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Elaine Bradfordt, also known as Robeana\n Diane McGuiness, a former Salem Ware, a Cuyahoga Metropolitan Housing\n Housing Authority (SHA) Section 8 tenant, Authority (CMHA) Section 8 landlord, and her\n was found guilty in Salem District Court, son Samuel Dickerson, the former managing\n Salem MA, on one count of larceny over agent of Housing Choice Voucher program\n $250 and one count of uttering a false Properties, were indicted in U.S. District Court,\n statement under oath. McGuiness was Cleveland, OH, on numerous counts of theft\n sentenced to 5 years probation, ordered to of government funds, making false statements\n refrain from accepting federal and/or state to SSA, and msking false statements to HUD.\n funded housing subsidies during her Bradfordt and Dickerson allegedly used a\n probation, and directed to pay a $1,000 fine. fictitious name and SSN to obtain SSA and\n McGuiness failed to report the joint tenancy HUD Section 8 benefits. In addition, Tonja\n or income of her boyfriend on SHA Williams, also known as Latonya McKinley,\n certifications and obtained $27,544 in SHA also a former CMHA Section 8 landlord, pled\n housing assistance she was not entitled to guilty to misuse of an SSN, msaking false\n receive. statements to HUD, mail fraud, and bank\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b fraud. Williams used aliases and a false SSN\n to acquire credit cards, bank accounts, and\n Prince Fianko, a Carroll County an FHA-insured mortgage on property she\n Housing Authority (CCHA) landlord, and leased to CMHA for a Section 8-eligible\n his wife Rosemary Sekyere, a CCHA family member but used the CMHA\n Housing Choice Voucher program recipient, subsidized property as her personal\n were each charged in Carroll County Circuit residence. As a result, HUD and SSA\n Court, Carroll County, MD, with theft, realized losses of $25,000 and $100,000,\n msking false statements to a housing respectively.\n authority, and common law conspiracy. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n From May 2004 to January 2006, Fianko,\n allegedly using an alias, hid his ownership Carlos Riosvalle, a former Portland\n and residence in a CCHA unit leased to his Housing Authority (PHA) Section 8 tenant,\n wife. As a result, Fianko and Sekyere was charged in Multnomah County Superior\n obtained about $26,000 in CCHA housing Court, Portland, OR, with numerous counts\n\n\n64 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cof theft and attempted aggravated theft. indicted in Cook County Circuit Court,\nFrom 1992 to 2005, Riosvalle allegedly failed Chicago, IL, on various counts of theft and\nto report his prior sex offense conviction on benefits fraud. Brian Booker allegedly\nannual PHA certifications and obtained fabricated a fictional landlord to accept\n$25,000 in PHA housing assistance he was CCHA housing assistance payments for a\nnot entitled to receive. property he owned and occupied. Robert\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Booker allegedly used his name as a straw\n CCHA Section 8 tenant, never resided in the\n Dorothy Hansen, a former Vermont CCHA subsidized unit, and signed annual\nState Housing Authority (VSHA) Section 8 CCHA certifications allowing Brian Booker\ntenant, pled guilty in U.S. District Court, to obtain $24,000 in CCHA housing\nBurlington, VT, to an information charging assistance payments he was not entitled to\nher with making false statements and theft receive.\nof government funds. Hansen failed to \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nreport employment income on VSHA\ncertifications and obtained $24,552 in VSHA Latisia Upshaw, a former Knoxville\nhousing assistance benefits she was not Community Development Corporation\nentitled to receive. VSHA terminated (KCDC) public housing tenant, was indicted\nHansen from its rental assistance program. in Knox County State Court, Knoxville, TN,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b for unlawfully and intentionally obtaining\n public housing, utility, and other services\n Raquel Bonifacio, a former Broward valued at $10,000 or more. Upshaw\nCounty Housing Authority (BCHA) Section allegedly failed to report household income\n8 tenant, was indicted in U.S. District Court, on KCDC annual certifications. As a result,\nMiami, FL, on theft of government funds Upshaw allegedly obtained $22,671 in\nand making false statements to HUD. From KCDC housing assistance she was not\nJanuary 2003 through December 2005, entitled to receive.\nBonifacio, a support services technician for \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nthe Federal Bureau of Investigation (FBI),\nallegedly failed to report her FBI Shelly Duffina, a former New\nemployment or income on BCHA Hampshire Housing Finance Authority\ncertifications and obtained $24,320 in BCHA (NHHFA) Section 8 tenant, and Bruce\nhousing assistance she was not entitled to McLaughlin, an unauthorized tenant\nreceive. residing with Duffina, were indicted in\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Hillsborough County Court, Nashua, NH.\n Duffina was charged with theft by\n Brothers Brian and Robert Booker, deception, and McLaughlin was charged\npurported Cook County Housing Authority with criminal liability for the conduct of\n(CCHA) Section 8 tenant and landlord, were another; theft by deception. Duffina\n\n\n\n\nCopyright, 2006. The Staff, Miami, FL. Reprinted with permission.\n\n\n HUD\xe2\x80\x99s Public and Indian Housing Programs 65\n\x0c allegedly failed to report McLaughlin\xe2\x80\x99s Kenneth R. Christenot, a Billings\n residency and income on NHHFA Housing Authority (BHA) Section 8\n certifications and obtained an estimated landlord, and Ramona Lee Emmett, a BHA\n $21,000 in NHHFA housing assistance she Section 8 tenant, were both found guilty in\n was not entitled to receive. U.S. District Court, Billings, MT, of making\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b false statements and theft of federal funds.\n Emmett claimed absent children as\n Sharon Smith, a former Elizabeth occupsants, and failed to declare property\n Housing Authority (EHA) Section 8 tenant ownership or the residency of Christenot on\n and Superior Court Judicial Clerk in Union, BHA certifications; Christenot failed to claim\n NJ, was sentenced in U. S. District Court, his residency with Emmett on BHA\n Newark, NJ, to 2 years probation and documents. As a result, HUD realized losses\n ordered to pay HUD $20,714 restitution for of $19,382.\n her earlier guilty plea to theft of government \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n funds. From January 2002 to September\n 2005, Smith caused fraudulent employment Linda Virginia McClain, a former\n verification forms to be submitted to EHA Housing Authority of the City of San\n and obtained $20,714 in EHA housing Buenaventura (HACSB) public housing\n assistance she was not entitled to receive. recipient, was found guilty in Ventura\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b County Superior Court, Ventura, CA, of\n grand theft. McClain failed to report rental\n Toria Woods, a former Inglewood income she received on HACSB\n Housing Authority (IHA) Section 8 tenant, certifications and obtained $19,170 in\n was convicted in Los Angeles County HACSB housing benefits she was not\n Superior Court, Beverly Hills, CA, on two entitled to receive.\n counts of filing a false/forged instrument \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and one count of grand theft. Woods was\n sentenced to 2 years in prison and ordered Gabriela Garcia, a Homestead Housing\n to pay IHA $20,612 restitution. Woods, a Authority (HHA) Housing Choice Voucher\n participant in an interstate identity theft program participant, pled guilty in U.S.\n ring, failed to report income she received District Court, Miami, FL, to theft of\n from the criminal activity on annual IHA government funds and making false\n housing certifications. IHA terminated statements. Garcia was sentenced to 60\n Woods from its Section 8 program. months supervised release and 50 hours\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b community service and ordered to pay HUD\n $18,622 restitution. Garcia concealed the\n James Bell, owner of The Thomas Clinic existence, residency, and income of her\n in Clayton, MO, pled guilty to an spouse on HHA certifications and obtained\n information filed in U.S. District Court, St. $18,622 in HHA housing assistance she was\n Louis, MO, charging him with making not entitled to receive.\n false statements. From 1999 to 2004, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Bell failed to disclose income or his\n business ownership to numerous Adam Doyle, an Omaha Housing\n agencies, including St. Louis Missouri Authority (OHA) Section 8 landlord, pled no\n Housing Authority (SLMHA) and SSA. As contest in Douglas County District Court,\n a result, Bell obtained about $753,810 in SSA Omaha, NE, to earlier charges of theft by\n disability, Medicaid, food stamps, and deceit. Doyle resided with an OHA tenant\n SLMHA housing assistance benefits he was at his OHA Section 8 leased property. As a\n not entitled to receive. HUD\xe2\x80\x99s loss is result, HUD realized a loss estimated at\n estimated at $20,590. $18,000.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n66 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c Angelina Lyles, a former DuPage to report household income on annual AHA\nHousing Authority (DPHA) Section 8 tenant, certifications, and Whatley allegedly failed\nwas sentenced in U.S. District Court, Chicago, to report to AHA that she received public\nIL, to 3 months incarceration, 3 months home housing assistance from AGHA. As a result,\nconfinement, and 3 years supervised release Herrin and Whatley allegedly obtained\nand ordered to pay HUD $17,901 restitution $16,813 in AHA housing assistance they\nfor her previous conviction for providing false were not entitled to receive.\nincome and family composition statements to \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nDPHA. In addition, Lyles and her landlord/\nbrother-in-law Lance Phillips were named in Janet Buckner, a St. Louis County\na four-count civil complaint under the False Housing Authority (SLCHA) Section 8\nClaims Act for allegedly failing to disclose recipient and USDA employee, was indicted\ntheir relationship on DPHA payment in U.S. District Court, St. Louis, MO, on\ncontracts. eight counts of making false statements to\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b HUD, USDA, and SSA. Buckner allegedly\n failed to report income and obtained more\n Kimberly Madrigal, a former Central than $16,000 in SLCHA housing assistance\nOregon Regional Housing Authority and $109,000 in USDA and SSA benefits she\n(CORHA) Section 8 tenant, was convicted was not entitled to receive.\nin Deschutes County Superior Court, Bend, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nOR, on one count of theft by deception.\nMadrigal was sentenced to 36 months Monique Murrell, a former Johnson\nprobation, and ordered to pay CORHA County Human Services and Aging Section\n$17,071 restitution. Madrigal failed to report 8 recipient, was charged in Johnson County\nSocial Security benefits she received on District Court, Leawood, KS, with one count\nbehalf of her dependent children on annual of theft and three counts of making false\nCORHA certifications. writings. From September 2003 to May 2006,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Murrell allegedly failed to disclose her\n employment and/or income on federal\n Rita Mae Hodge, also known as Patricia housing certifications. As a result, HUD\nJackson, pled guilty in U.S. District Court, realized a loss of $16,170.\nColumbus, OH, to making false statements \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nand SSA fraud. Hodge used a fictitious\nname and SSN to simultaneously obtain Theresa Gray, a former Portland\nColumbus Metro Housing Authority Housing Authority (PHA) Section 8 tenant,\n(CMHA) Section 8 tenant housing assistance was sentenced in Cumberland County\npayments, CMHA Section 8 landlord Superior Court, Portland, ME, to 14 days\npayments on four CMHA subsidized units, incarceration and ordered to participate in\nand SSA benefits. As a result, HUD and SSA a diversion and rehabilitative program and\nrealized losses of $17,000 and $96,000, pay PHA $5,000 restitution for her earlier\nrespectively. guilty plea to theft by unlawful taking or\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b transfer. From July 2001 through December\n 2004, Gray failed to report employment\n Catherine Rouse Herrin, an Aiken income on PHA certifications and obtained\nHousing Authority (AHA) Section 8 tenant, $16,000 in PHA housing assistance she was\nand Elmira Whatley, an AHA Section 8 and not entitled to receive. PHA terminated\nAugusta Housing Authority (AGHA) public Gray from its rental assistance program.\nhousing tenant, were indicted in U.S. District \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nCourt, Augusta, GA, for making false\nstatements to HUD. Herrin allegedly failed\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 67\n\x0c Joanne Mallett, a former Massachusetts result, Medina allegedly obtained more than\n Department of Housing and Community $9,000 in SGHA housing assistance\n Development (MADHCD) Section 8 payments she was not entitled to receive.\n landlord, pled guilty in Winchendon District \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Court, Winchendon, MA, to larceny over\n $250 by false pretense. Mallett was Gerard Hernandez, a Goodhue County\n sentenced to 36 months probation and Housing Authority (GCHA) landlord, and\n ordered to pay RCAP, Inc., a MADHCD Robin Denise Gard, also known as Denise\n Section 8 contract administrator, $14,532 Hernandez, a GCHA Section 8 tenant, were\n restitution. From May 2001 through October charged in a criminal complaint filed in\n 2003, Mallett leased a MADHCD Section 8 Goodhue County Court, Goodhue County,\n unit to her sister and falsely certified that MN, with three counts of felony theft by\n she was not related to her. As a result, swindle. Hernandez and Gard allegedly\n Mallett obtained $14,532 in MADHCD created fictitious documents, claiming that\n housing assistance contract payments she Hernandez owned property and leased the\n was not entitled to receive. property to GCHA Section 8 tenant Gard.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Hernandez allegedly rented the property\n from a market rent landlord and then jointly\n Kamilah Rainey, a former Lakeland occupied the unit as husband and wife with\n Housing Authority (LHA) Section 8 tenant, Gard. HUD\xe2\x80\x99s loss is estimated at $8,000.\n pled guilty in Tenth Judicial Circuit Court, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Bartow, FL, to public assistance fraud for\n failing to disclose earned income on LHA Yadiris Dela Rosa, a former Maine State\n annual certifications. Rainey was sentenced Housing Authority (MSHA) Section 8\n to 5 years probation and ordered to pay LHA tenant, pled guilty in Skowhegan District\n $11,460 restitution. Court, Skowhegan, ME, to theft by\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b deception. Dela Rosa was sentenced to serve\n 364 days in prison (9 months and 1 day\n Sherry White, a Fairfield Housing suspended) and 2 years probation and\n Authority (FHA) Housing Choice Voucher ordered to pay PropSys, an MSHA Section 8\n program participant, and Arthur White, an contractor administrator, $7,520 restitution.\n FHA landlord, were each indicted in U.S. From July 2004 to October 2005, Dela Rosa\n District Court, Fairfield, AL, on theft of lived in Massachusetts and New York while\n HUD funds. From May 2003 to May 2004, receiving MSHA housing assistance in\n Sherry and Arthur White allegedly provided Skowhegan, ME. As a result, Dela Rosa\n false documentation and failed to report obtained $7,520 in housing assistance she\n their father/daughter relationship to FHA. was not entitled to receive.\n As a result, Sherry White allegedly obtained \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n $9,876 in FHA housing assistance she was not\n entitled to receive. Abel Vilcapoma, a former Worcester\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Housing Authority (WHA) Section 8\n landlord, pled guilty in Worcester District\n Antonia Medina, a South Gate Housing Court, Worcester, MA, to making false\n Authority (SGHA) Section 8 recipient, was claims to a government agency and\n charged in Los Angeles County Superior conspiracy. Vilcapoma was sentenced to 6\n Court, Downey, CA, with obtaining money months probation and ordered to pay the\n by false pretenses. Medina allegedly failed court $376; Vilcapoma previously agreed to\n to disclose the unauthorized tenancy of her repay WHA $6,320. Vilcapoma, the owner\n daughter or notify SGHA of her relocation of rental property leased to a WHA Section\n and residency in Chula Vista, CA. As a 8 tenant, sold the property and conspired\n\n\n68 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0cwith the new owner to continue collecting ownership on housing assistance\nhousing assistance contract payments from applications.\nWHA. As a result, Vilcapoma obtained\n$7,070 in WHA housing assistance contract Fugiti\n Fugitivve Felon Initiati\n Initiativves\npayments he was not entitled to receive.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Section 903 of Public Law 104-193 is\n entitled \xe2\x80\x9cElimination of Housing Assistance\n Diane Schauman, a former City of Mesa\n with Respect to Fugitive Felons and\n(CM) Housing Choice Voucher program\n Probation and Parole Violators.\xe2\x80\x9d Signed into\nparticipant, was indicted in Maricopa\n law in 1996, it allows for an immediate\nCounty Superior Court, Phoenix, AZ, for\n tenancy termination of public housing\ntheft. Schauman allegedly failed to report\n tenants who flee to avoid prosecution or\nwages from full-time employment on CM\n confinement after conviction of a felony or\ncertifications and obtained more than $7,000\n when felons violate parole or probation\nin CM housing assistance she was not\n conditions imposed under federal or state\nentitled to receive. CM terminated\n laws. This law also authorizes law\nSchauman from its rental assistance\n enforcement agencies to exchange\nprogram.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n information and perform data matches.\n\n HUD assists approximately 4.8 million\n Norlene Smith, a former Eustis Housing\n households through public housing and\nAuthority (EHA) public housing tenant, was\n rental assistance including Section 8 and\narrested after an information was filed in Lake\n Housing Choice Voucher programs.\nCounty Fifth Judicial Circuit Court, Lake\n Reducing overpaid rent subsidies is one of\nCounty, FL, charging her with one count of\n HUD\xe2\x80\x99s management improvement goals as\npublic assistance fraud. From August 2004 to\n stated in the President\xe2\x80\x99s Management\nJune 2005, Smith allegedly failed to disclose\n Agenda, as well as an OIG goal as stated in\ntrue household income on EHA annual\n our strategic plan. The identification and\ncertifications and obtained $5,172 in housing\n termination of fugitive felons fleeing felony\nassistance she was not entitled to receive.\n prosecution or probation and parole\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n violators, may impact HUD\xe2\x80\x99s housing\n assistance subsidies.\n Dean P. Proffitt, Orbin Dale May, Ernest\nA. White, Howard E. Schneider, Osamn\n The Office of Investigation (OI)\nAbdulluhl, Elias Mohamed, Ahmed\n continues to increase Fugitive Felon\nMuhidin Sharif, Hiram Chebar Olover,\n Initiatives (FFI) by matching HUD housing\nAbdulfatah Osman Farah, Adil Majlovic,\n assistance information with crime data from\nMerud Kajtazovic, Abdirizak Abdi\n the National Crime Information Center , U.S.\nMohamed, Abdiwahab Mohamud\n Marshals Service (USMS), and/or\nMohamed, Yusuf Kalmole, and Samir\n participating states. Since the inception of\nHasanovic were arrested after their\n OI\xe2\x80\x99s FFI, hundreds of cases have been\nindictments in U.S. District Court, Kansas\n opened and closed, resulting in more than\nCity, MO, on conspiracy to commit fraud\n 5,600 arrests. In addition, OI provides tenant\nin obtaining commercial drivers\xe2\x80\x99 licenses\n records matching USMS wanted persons\nthrough the state of Missouri. The above\n lists and participates in \xe2\x80\x9cOperation\ndefendants allegedly participated in a food\n FALCON,\xe2\x80\x9d a USMS operation designed to\nstamp and Section 8 housing assistance\n apprehend fugitive felons living in public\nfraud scheme by obtaining cash for their\n and assisted housing.\nfood stamp cards and failing to disclose\nemployment, income, or business\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 69\n\x0c Copyright, 2006. The Associated Press, Washington, DC. Reprinted with permission.\n\n\n Operation FALCON (Federal and Local those arrested resided in HUD-assisted\n Cops Organized Nationally), a nationwide housing.\n fugitive felon apprehension operation \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n coordinated by USMS, combines federal,\n state, city, and county law enforcement The Dallas Fort Worth Fugitive\n resources in a joint effort to locate and Apprehension Strike Team, representing law\n apprehend criminals wanted for violent enforcement personnel from USMS; the U.S.\n crimes. Conducted in most major cities Department of Veterans Affairs (VA) OIG;\n throughout the United States and its SSA OIG; the Texas Department of\n territories, Operation FALCON places a Public Safety Rangers and Criminal\n strong emphasis on violent crimes involving Intelligence Divisions; the Dallas, Fort\n gangs, weapons, homicides, and sexual Worth, Commerce, and Greenville Police\n assaults, along with crimes against children Departments; the Dallas County, Tarrant\n and the elderly. HUD OIG strongly County, Hunt County, and Johnson County\n supports Operation FALCON in an effort to Sheriff \xe2\x80\x99s Departments; and HUD OIG\n make HUD-assisted housing a safe place for arrested 66 individuals on outstanding\n families to live. warrants at Turner Courts and Rhoads\n Terrace, Dallas Housing Authority public\n HUD OIG participated in \xe2\x80\x9cOperation housing units in Dallas, TX, and numerous\n FALCON II,\xe2\x80\x9d a USMS action initiated to HUD-assisted units located in southeast Fort\n identify, locate, and apprehend violent Worth, TX, on various charges\n fugitives, particularly those charged with including murder, attempted murder,\n sex crimes. As a result, 3,647 individuals possession of controlled substances, sexual\n were arrested on outstanding felony assault, aggravated sexual assault, child\n warrants in East St. Louis, IL, and St. Louis, endangerment, and/or robbery. Thirty-nine\n MO; Kansas City metropolitan area; of the subjects arrested received HUD\n Colorado; Utah; Montana; Los Angeles, housing assistance, and 41 individuals were\n San Francisco, Richmond, Salinas, San referred for termination from HUD\xe2\x80\x99s rental\n Jose, Sacramento, and Marysville, CA; assistance program.\n Phoenix, AZ; Las Vegas, NV; Houston, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n Dallas, Fort Worth, and San Antonio, TX;\n Oklahoma City, OK; Chicago, IL; and As part of a national FFI involving law\n Minneapolis, MN metropolitan areas. enforcement personnel from USMS; the\n HUD OIG arrested 719 individuals; 172 of Bureau of Alcohol, Tobacco, Firearms, and\n\n\n70 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c Explosives (ATFE); Immigration and U.S. Attorney Kenneth L. Wainstein\n Customs Enforcement (ICE); the FBI; announced the indictments and/or arrests of\n the Hartford Police Department Vice, 24 individuals on numerous charges\n Narcotics, and Intelligence Divisions; the including unlawful distribution of a\n Waterbury Police Department; the State of controlled substance, conspiracy, possession\n Connecticut Adult Probation and Parole of firearms without a license, and/or\n Departments; the Connecticut State Police; unlawful possession of ammunition after a\n and HUD OIG, 47 individuals were arrested 5-month District of Columbia (DC) Public\n in Hartford, CT, and 33 individuals were Housing Safety Initiative (PHSI) operation\n arrested in Waterbury, CT, on various at Woodland Terrace Apartments, a DC\n charges including possession of narcotics Housing Authority (DCHA) housing\n with intent to distribute, illegal possession development in Washington, DC. During\n of narcotics in a school zone, sexual assault, this operation, the DC PHSI task force,\n forgery, robbery, burglary, assault, assault consisting of law enforcement personnel\n of a police officer, escape of custody, grand from the DC Metropolitan Police, DCHA\n larceny, and/or probation violations. Police, and HUD OIG, seized illegal drugs,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b including PCP, cocaine, marijuana, and\n ecstasy, along with two vehicles and\n HUD OIG\xe2\x80\x99s Newark field office firearms. As a result, DCHA initiated three\n participated in a USMS FFI in Hoboken eviction proceedings against resident\n Housing Authority (HHA) housing violators arrested.\n developments located on Jackson Street, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Harrison Street, and Marshall Drive in\n Hoboken, NJ. The USMS operation focused In Worcester, MA, 21 individuals,\n on the cooperative efforts of law including five Worcester Housing Authority\n enforcement and HHA to dismantle a (WHA) Section 8 and/or public housing\n suspected drug distribution ring and arrest/ tenants, were arrested at a WHA public\n evict fugitive felons from HHA housing housing development on outstanding\n projects. During the initiative, 34 warrants. The arrests resulted from a\n individuals were arrested on outstanding Worcester Police Department \xe2\x80\x9cruse,\xe2\x80\x9d which\n warrants for sex crimes; assaults; and lured the subjects, believing they were to\n narcotics, parole, child support, and/or receive cash from the State of Massachusetts,\n traffic violations. In addition, a heroin and Massachusetts Department of Transitional\n cocaine distribution ring was dismantled. Adjustment, to the WHA public housing\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b site.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nCopyright, 2006. Telegram & Gazette, Worcester, MA. Reprinted with permission.\n\n\n\n HUD\xe2\x80\x99s Public and Indian Housing Programs 71\n\x0c The Philadelphia PHSI task force, Danilo Rico, a former East Hartford\n consisting of law enforcement personnel Housing Authority (EHHA) Section 8\n from ATFE, the Drug Enforcement Agency tenant, pled guilty in U.S. District Court,\n (DEA), USMS, the Philadelphia District Hartford, CT, to one count of possession of\n Attorney\xe2\x80\x99s Office, the Philadelphia Police a firearm by a convicted felon. Rico was in\n Department, Philadelphia Housing possession of a 9 millimeter handgun seized\n Authority (PHA) Police, the Eastern District during execution of a federal search warrant\n of Pennsylvania U.S. Attorney\xe2\x80\x99s Office, and at his EHHA Section 8 unit. EHHA\n HUD OIG arrested six individuals on terminated Rico from its rental assistance\n outstanding warrants for possession of crack program.\n cocaine, producing and distributing\n marijuana, and/or driving under the Other Fraud/Crimes\n influence (DUI) violations in or near Paschall\n housing development, a PHA subsidized\n housing complex in Philadelphia, PA. In Kevin Timochenko, a Reading City\n addition, two subjects living next to PHA Housing Authority (RCHA) landlord and\n Section 8 program participants were owner of Metropolitan Management\n arrested for constructing and operating a Corporation, was charged in an information\n marijuana \xe2\x80\x9cgrow house,\xe2\x80\x9d complete with an filed in U.S. District Court, Reading, PA,\n elaborate tube ventilation system, lighting, with one count of theft from an interstate\n and drying production facilities, and pipeline. Timochenko, representing that he\n supplying the controlled substance to paid tenant utilities in his RCHA housing\n individuals around Paschall housing units. assistance payment contract, allegedly\n As a result of this operation, one PHA directed his maintenance staff to install by-\n resident was arrested. pass devices on utility meters and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n pilfered natural gas valued at approximately\n $1 million from UGI Utilities, Inc.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Sheila L. Williams, Sebrina D. Long,\n Sarah L. Brooks, and Andrea Holmes,\n Michael Ciarcia, owner of Ciarcia\n Greensboro Housing Authority (GHA) and/\n Construction, LLC, was sentenced in U.S.\n or Housing Authority of Winston-Salem\n District Court, Hartford, CT, to two\n (HAWS) Section 8 or public housing tenants,\n concurrent 13-month prison sentences and\n were arrested at their GHA/HAWS\n two concurrent 2-year probation terms for\n subsidized units in Greensboro and\n his earlier conviction on money laundering\n Winston-Salem, NC, for probation\n and conspiracy to commit money\n violations relating to their earlier convictions\n laundering charges. Ciarcia, a rehabilitation\n on embezzlement, assault with a deadly\n contractor with the Housing Authority of the\n weapon, and narcotics violations. GHA and\n City of New Britain (HANB), certified a\n HAWS terminated Williams, Long, and\n ghost employee, previously indicted Luis\n Brooks from their rental assistance\n Santiago, on HANB certifications to\n programs.\n facilitate laundering Santiago\xe2\x80\x99s illicit drug\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n sales proceeds through Ciarcia\n Construction, LLC\xe2\x80\x99s payroll.\n Julio Pizzaro, a previously convicted sex \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n offender and resident of a New York City\n Housing Authority (NYCHA) Section 8 unit, Billy Nsubuga, a former Malden\n was arrested on an outstanding warrant for Massachusetts Housing Authority (MMHA)\n parole violations by the New York/New Section 8 tenant, was sentenced in U.S.\n Jersey Regional Fugitive Task Force (NY/NJ District Court, Boston, MA, to 13 months\n RFTF) in New York, NY. incarceration and 36 months supervised\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n72 HUD\xe2\x80\x99s Public and Indian Housing Programs\n\x0c \xe2\x80\x9cMoney Launderer Sentenced\xe2\x80\x9d by Courant Staff Reports, published 7/6/06:\n \xe2\x80\x9cCopyright, 2006, Hartford Courant. Reprinted with permission\xe2\x80\x9d\n\n\n\nrelease and ordered to pay two financial before her detection by New York and\ninstitutions $107,401 restitution and is also Connecticut banks.\nsubject to deportation for her previous guilty \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nplea to numerous counts of bank fraud, mail\nfraud, identity theft, and identity document Samuel Lewis, a former Worcester\nfraud. Nsubuga opened bank accounts in Housing Authority (WHA) public housing\nMassachusetts, New York, and Connecticut tenant, was convicted in U.S. District Court,\nwith cash deposits in the names of others, Worcester, MA, on 15 counts of making false\nusing altered passports from Uganda, The statements to procure firearms. Lewis\nRepublic of Congo, and South Africa, along provided a false address on documents he\nwith bogus identification documents from used to purchase firearms while residing in\nCalifornia. Nsubuga received more than a WHA public housing unit.\n$100,000, which was not reported to MMHA,\n\n\n\n\nHUD\xe2\x80\x99s Public and Indian Housing Programs 73\n\x0c\x0c Chapter 4\nHUD\xe2\x80\x99\nHUD\xe2\x80\x99ss Multifamil\n Multifamilyy\nHousin\nHousingg Pr\n Proog rams\n\x0c In addition to multifamily housing\n developments with U.S. Department\n Owner and Mana\n Manag gement\n of Housing and Urban Development Agent Operations\n Agent\n (HUD)-held or HUD-insured mortgages, the\n Department owns multifamily projects Over the past 6 months, OIG has\n acquired through defaulted mortgages, audited owner and management agent\n subsidizes rents for low-income operations with an emphasis on combating\n households, finances the construction or equity skimming. While our objectives\n rehabilitation of rental housing, and varied by auditee, the majority of the\n provides support services for the elderly reviews were to determine whether the\n and handicapped. owner and/or management agent used the\n project funds in compliance with the\n regulatory agreement and HUD\n Audits requirements. The results of OIG\xe2\x80\x99s more\n significant audits are described below.\n During this period, the Office of\n Inspector General (OIG) issued eight At the request of HUD, OIG audited the\n external reports in the multifamily housing Rhode Island Housing and Mortgage\n program area. These reports disclosed Finance Corporation, a state housing agency\n almost $4.9 million in questioned costs and located in Providence, RI. The Corporation\n almost $5.3 million in recommendations that incorrectly processed Section 8 housing\n funds be put to better use. assistance payment contract renewals for\n eight developments. It included debt service\n at incorrect levels and failed to reduce\n Section 8 contract rents, resulting in more\n\n\n A Look Bac\n Back k ffor\n or the Year\n Year\n Chartt 4.1: Per\n Char centa\n Percenta ge of OIG Multifamil\n centag Multifamilyy Housin\n Housing g Closed Audit Cases\n Cases,, Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 22%\n Chicago\n Region 7-8\n 6% Region 2\n Kansas City\n 28% New York\n 0%\n\n\n\n\n Region 3\n Philadelphia\n 0%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 38% Atlanta\n Region 6 0%\n Fort Worth\n 6%\n\n\n\n\n76 HUD\xe2\x80\x99s Multifamily Housing Programs\n\x0cthan $1.8 million in Section 8 subsidy and implement management controls to\noverpayments to the development owners. ensure that unauthorized cash distributions\nThe Corporation did not recover the do not recur, repay Wellspring at Aurora for\noverpayments. It also violated federal the unauthorized loans to other projects,\nregulations when it allowed two develop and implement management\ndevelopments to use more than $900,000 in controls to ensure that unauthorized loans\nrestricted residual receipts to pay financing do not recur, eliminate all asset management\nfees to the Corporation, the Corporation\xe2\x80\x99s fee accrual accounts, develop and\naffiliated Affordability Housing Trust, and implement management controls to ensure\none development owner. that expenses accrued and/or charged to\n projects are legitimate project-related\n OIG recommended that HUD require expenses, and properly allocate its corporate\nthe Corporation to (1) actively pursue and expenses. (Audit Report: 2006-DE-1004)\nrecover just under $1.2 million in Section 8 \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nsubsidy overpayments from six\ndevelopment owners, (2) confirm that it HUD OIG audited Sundial Care Center\nreturned more than $657,000 in located in Modesto, CA. OIG found that\noverpayments collected from two the owner used almost $660,000 in project\ndevelopment owners to the appropriate funds for nonproject (ineligible) and\naccounts, (3) develop and implement undocumented costs and could not account\nprocedures to ensure that HUD for more than $407,000 in project revenue\nrequirements governing the renewal of receipts. The owner \xe2\x80\x99s noncompliance\nexpiring Section 8 housing assistance caused a default on the insured mortgage\npayment contracts are followed, and (4) and HUD\xe2\x80\x99s $3.6 million loss on the\nclarify its procedures to ensure that residual subsequent sale of the mortgage note.\nreceipts are restricted to authorized uses.\nFurther, OIG recommended that HUD OIG recommended that HUD require\nconfirm that the Corporation returned more the owner to repay HUD\xe2\x80\x99s FHA insurance\nthan $945,000 to the appropriate restricted fund almost $1.1 million, pursue double\naccounts. (Audit Report: 2006-BO-1009) damages remedies against the owner, and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b take administrative actions against the\n owner and its principals/officers. (Audit\n In response to a referral from HUD, OIG Report: 2006-LA-1011)\naudited two projects owned and managed \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nby Juniper Communities. One of the\nprojects, Wellspring at Aurora, made HUD OIG reviewed Wellston\nunauthorized cash distributions totaling Townhouses, a 63-unit project located in St.\nmore than $165,000, prematurely withdrew Louis County, MO. Wellston Townhouses\xe2\x80\x99\nmore than $912,000, and had loans managing owner did not use project funds\noutstanding from other Federal Housing in compliance with the regulatory\nAdministration (FHA)-insured projects agreement and violated several other terms\ntotaling more than $127,000 as of December of the agreement. These violations, totaling\n31, 2005. In addition, Juniper accrued almost $305,000, adversely affected the\nunallowable asset management fees totaling project\xe2\x80\x99s financial stability.\nalmost $130,000 and improperly allocated\ncorporate expenses to Wellspring at Aurora. OIG recommended that HUD take\n appropriate actions to correct deficiencies\n OIG recommended that HUD require and ensure that these violations will not\nJuniper to repay Wellspring at Aurora for recur. (Audit Report: 2006-KC-1011)\nthe unauthorized cash distributions, develop \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nHUD\xe2\x80\x99s Multifamily Housing Programs 77\n\x0c HUD OIG reviewed HDC Retirement HUD OIG conducted a review of Deer\n Village, a 48-unit project located in St. Louis, Creek Apartments (project), a Section\n MO. HDC Retirement Village\xe2\x80\x99s managing 221(d)(4)-insured multifamily housing\n owner did not use project funds in project in Houston, TX. The project\xe2\x80\x99s owner\n compliance with the regulatory agreement generally complied with the regulatory\n and also violated several other terms of the agreement and HUD regulations; however,\n agreement. These violations, totaling almost the previous management agent paid itself\n $210,000, adversely affected the project\xe2\x80\x99s more than $24,000 for unsupported\n financial stability. expenses.\n\n OIG recommended that HUD take OIG recommended that HUD require\n appropriate actions to correct deficiencies the project\xe2\x80\x99s owner or its prior management\n and ensure that these violations will not agent to either provide documentation to\n recur. (Audit Report: 2006-KC-1012) show that the charges were for actual work\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b performed and that the fees charged were\n reasonable and necessary or repay the\n HUD OIG audited the Utah Non Profit expenses to the project. HUD should also\n Housing Corporation, Salt Lake City, UT, a determine whether the prior management\n management agent for nine properties agent charged other HUD-insured projects\n assisted by HUD. Utah Non Profit did not for these unsupported fees and if so, require\n ensure that seven properties generated that the same documentation be provided\n sufficient funds to meet their financial or the fees be repaid for those projects as\n obligations. It deferred payments to itself well. (Audit Report: 2006-FW-1010)\n to pay the projects\xe2\x80\x99 other expenses. It also\n improperly charged salary costs to Section 202 Suppor ti\n tivve\n Supporti\n properties based on an arbitrary,\n unsupported rate and billed properties for Housin\n Housingg ffor\n or the Elderl\n Elderlyy\n more than $49,000 in supervisor salaries that\n its management fee should have covered. In HUD OIG audited the Bridgeport,\n addition, it paid more than $21,000 for CT, project Hall Commons, Inc.\xe2\x80\x99s,\n unnecessary expenses and may be paying administration of its Section 202 Supportive\n more than $31,000 annually more than Housing for the Elderly capital advance\n necessary for services. construction funds to determine whether\n Hall Commons administered the Section 202\n OIG recommended that HUD require funds advanced for construction in\n the project owners to ensure that Utah Non accordance with federal requirements.\n Profit submits rent increases in a timely\n manner to reduce operating deficits and pay Hall Commons failed to maintain\n the accrued management fees, implements adequate and essential financial records to\n an acceptable allocation plan, reimburses accurately account for project financial\n the properties for ineligible salaries and transactions and safeguard project assets. It\n unnecessary costs, and develops and also made unauthorized disbursements and\n implements adequate management controls allowed required insurance policies to lapse\n to ensure compliance with HUD due to nonpayment of premiums. As a\n requirements. (Audit Report: 2006-DE- result, more than $2 million in capital\n 1005) advances and payments to vendors and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b contractors was not properly recorded, more\n than $199,000 in project funds was disbursed\n in violation of the governing project\n agreements, the project was not always\n\n\n\n78 HUD\xe2\x80\x99s Multifamily Housing Programs\n\x0ccovered by builder\xe2\x80\x99s risk or crime insurance,\nand real estate taxes were delinquent.\n\n OIG recommended that HUD (1)\npursue applicable sanctions available under\nthe regulatory agreement to protect its $4\nmillion investment, including issuing a\nnotice of default and if the violations are not\ncorrected within 30 days of declaring a\ndefault, taking possession of the project,\nforeclosing on the mortgage, or requiring a\ntransfer of physical assets to a HUD-\napproved nonprofit corporation, and (2)\nrequire Hall Commons, Inc., to support and/\nor repay the more than $199,000 in project\nfunds that were disbursed in violation of the\ngoverning project agreements. If Hall\nCommons is allowed to remain the owner,\nHUD should require it to establish a\nfinancial accounting system and maintain\ncurrent and accurate books and accounts\nand a functioning board of directors to\nprovide adequate oversight of project\noperations. (Audit Report: 2006-BO-1008)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nHUD\xe2\x80\x99s Multifamily Housing Programs 79\n\x0c Investi\n Inv gations\n estig Some investigations discussed in this re-\n port were conducted by OIG or jointly with\n During this reporting period, OIG federal, state, and local law\n opened 54 investigation cases and closed 60 enforcement agencies. The results of\n cases in the multifamily housing program various significant investigations are\n area. Judicial action taken on these cases described below.\n during the period included $6,472,308 in\n investigative recoveries, $3,211,285 in funds Theft/Embezzlement\n heft/Embezzlement\n put to better use, 59 indictments/\n informations, 43 convictions/pleas/pretrial Jill M. Trayner, the former executive\n diversions, 120 administrative actions, 1 director of United Methodist Retirement\n personnel action, and 97 arrests. Center of Tampa, Inc. (UMRCT), also known\n Char\n Chartt 4.2: Multifamil\n Multifamilyy Housing Reco\n Housing veries\n Recov as Methodist Place, a HUD-funded\n multifamily elderly housing complex, was\n Public Section 8 sentenced in U.S. District Court, Tampa, FL,\n Corruption Section 8\n 0% ($2,000) Landlord Fraud\n Tenant Fraud\n 2% ($175,034)\n to 1 year and 1 day in prison, mandatory\n 6% ($460,300)\n Embezzlement\n attendance in a mental health program during\n Equity Skimming\n 23% ($1,661,278) 10% ($737,456) her incarceration, and 36 months supervised\n released; fined $5,000; and ordered to pay\n UMRCT $366,228 restitution for her previous\n guilty plea to theft of federal program funds.\n Trayner used her position to divert UMRCT\n False Statements\n Total Recoveries $6,472,308 59% ($4,216,719) program funds and used the funds for\n personal expenses including gambling, loan\n payments, credit card debt, and club\n memberships.\n\n A Look Bac k ffor\n Back or the Year\n Year\n Char\n Chartt 4.3: Per centa\n Percenta ge of OIG Multifamil\n centag Multifamilyy Housin\n Housingg Closed In vesti\n Inv gation Cases\n estig Cases,, Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 10%\n Chicago\n Region 7-8\n 9% Region 2\n Kansas City\n 23% New York\n 6%\n\n\n\n\n Region 3\n Philadelphia\n 15%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 16% Atlanta\n Region 6 10%\n Fort Worth\n 12%\n\n\n\n\n80 HUD\xe2\x80\x99s Multifamily Housing Programs\n\x0c submitted inflated and false invoices for\n security services. As a result, HUD paid\n approximately $260,431 for services not\n provided.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Wanda Mercado, a former Peabody\n Properties manager at Schoolhouse 77, a\n HUD-subsidized multifamily complex, pled\n guilty in U.S. District Court, Boston, MA,\n to five counts of bribery. Mercado solicited\n and received more than $34,000 in bribes\n from 10 Section 8 applicants for HUD-\n assisted housing units at Schoolhouse 77. As\n a result, HUD realized losses exceeding\n $151,478 when housing assistance payments\n were paid on behalf of 10 unqualified\n tenants.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Charles Sitter, a property manager at\n Copyright, 2006. The Tampa Tribune, East Main Street Apartments, a HUD-\n Tampa, FL. Reprinted with permission. funded multifamily elderly housing\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n complex, was arrested and charged in\n Seneca County District Court, Waterloo, NY,\n Larry Lippman, a managing agent for with grand larceny. Sitter allegedly extorted\nRepublic Management at Eastwood Terrace $60,000 from an elderly tenant by\nApartments (ETA), a HUD-funded threatening eviction if the payment was not\nmultifamily apartment complex in made.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nNacogdoches, TX, was indicted in U.S.\nDistrict Court, Beaumont, TX, on three\ncounts of embezzlement. From August 2000 Jorge Hernandez Cruz, a former\nto June 2003, Lippman allegedly paid manager at Casa De Las Hermanitas\nhimself an unauthorized annual salary of (CDLH), a HUD-subsidized multifamily\n$60,000 and hid the salary payments by complex, was arrested after a complaint was\nmanipulating ETA accounts under his filed in Los Angeles County Superior Court,\ncontrol. As a result, HUD\xe2\x80\x99s loss is estimated Los Angeles, CA, charging him with\nat $300,000. commercial bribery and theft. Cruz\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b allegedly solicited and received payments\n from nine elderly families for placement into\n On Guard Security Services, Inc. CDLH housing units, illegally bypassing\n(OGSS), a security contractor for HUD other applicants on the CDLH waiting list.\nMultifamily Mortgagee-In-Possession In addition, Cruz allegedly demanded\nproperties located in Kentucky and additional monies from applicants reaching\nTennessee, pled guilty to an information the top of the waiting list before assigning\nfiled in U.S. District Court, Spartanburg, SC, CDLH housing units.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\ncharging it with making false, fictitious, or\nfraudulent claims and general provision\ncrimes. For approximately 2 years, OGSS Jerri Kirby, the former property manager\n at College Hill Apartments, a HUD-subsidized\n\n\nHUD\xe2\x80\x99s Multifamily Housing Programs 81\n\x0c multifamily housing complex, pled guilty in Tamyra T. Nelson, a Maryland state\n Clermont County Municipal Court, correctional officer, was indicted in\n Columbus, OH, to one count of theft for Wicomico County District Court, Salisbury,\n personally using tenant rents she collected. MD, on theft and making false statements.\n Kirby was sentenced to 3 months incarceration Deniece Davis, a Wicomico County\n and 2 years probation and ordered to pay Detention Center correctional officer, pled\n College Hill Apartments $4,100 restitution. guilty to making false statements. Nelson\n and Davis, former Section 8 tenants at\n Rental Assistance Fraud Pemberton Manor Apartments, a HUD-\n subsidized multifamily complex, allegedly\n failed to report income on annual housing\n Olandria Williams, a former Shoreview certifications and allegedly obtained\n Apartments Section 8 tenant, was sentenced approximately $20,000 in housing assistance\n in U.S. District Court, San Francisco, CA, they were not entitled to receive.\n to 1 year probation and ordered to pay HUD \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n $45,072 restitution for her earlier guilty plea\n to making false statements to HUD. Pia Benjamin, a HUD multifamily\n Williams falsified reported income, failed to Section 8 tenant and New York Police\n reside in her subsidized unit, and obtained Department (NYPD) school safety officer,\n $45,072 in housing assistance she was not was charged in a criminal complaint filed\n entitled to receive. in Brooklyn Criminal Court, Brooklyn, NY,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n with grand larceny, falsifying business\n records, and offering a false instrument for\n Rosalyn Tillery, a former La Salle filing. Benjamin allegedly failed to report\n Apartments Section 8 tenant, was sentenced her NYPD employment or income on\n in U.S. District Court, San Francisco, CA, housing certifications and obtained\n to 2 years probation and 25 hours of approximately $19,282 in housing assistance\n community service and ordered to pay HUD she was not entitled to receive.\n $35,759 restitution for her previous guilty \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n plea to making false statements to HUD.\n Tillery failed to report income or property Elsa Ondina Herrera-Martinez, a former\n she jointly owned with her spouse on Section 8 tenant at High Point Village, a\n Section 8 certifications. HUD-subsidized multifamily complex, was\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n indicted in U.S. District Court, Boston, MA,\n on theft of government funds, aggravated\n Donald Pierce, a former Maine State identity theft, and illegally obtaining a Social\n Housing Authority (MSHA) Section 8 tenant Security number (SSN). Herrera-Martinez\n at William Woods Apartments in Rockland, allegedly used the identity of another person\n ME, pled guilty in U.S. District Court, to obtain more than $15,000 in Section 8\n Portland, ME, to making false statements. housing assistance payments.\n Pierce failed to disclose income and assets, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n including $165,000 in certificates of deposit,\n more than $80,000 in an investment account, Paulita Brigham, an Internal Revenue\n and/or $145,000 in cash seized by the State Service (IRS) employee and Section 8 tenant\n of Maine, on MSHA housing assistance of Friendship Village, a HUD-funded\n certifications. As a result, Pierce obtained multifamily housing complex, entered into\n $26,987 in MSHA housing assistance he was a plea agreement in Jackson County Circuit\n not entitled to receive. Pierce remains in Court, Kansas City, MO, and was sentenced\n state custody for his earlier conviction on to 12 months probation and 40 hours of\n narcotics violations. community service for stealing government\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n82 HUD\xe2\x80\x99s Multifamily Housing Programs\n\x0cfunds. Brigham failed to disclose her IRS or My Place, Inc., Antonio Giordano,\nemployment and/or income on annual HUD Inc., Construction Software, Inc.,\ncertifications and obtained $4,766 in housing Consultants, Inc., Simon and Windsor, Inc.,\nassistance she was not entitled to receive. Gregory Building Company, Management\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Realty Services, and/or Sterling Health Care\n Management Company, identity-of-interest\n Mikael Best, a previously convicted sex companies authorizing payments for\noffender and Section 8 tenant at Harlen unwarranted services while the properties\nHouses in New York City, NY, was arrested were in a non-surplus-cash position,\non an outstanding warrant for parole a violation of their HUD regulatory\nviolations. The New York/New Jersey agreement. Giordano and Montecalvo were\nRegional Fugitive Task Force arrested Best. further indicted in Rhode Island Superior\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Court on 45 counts of conspiracy to\n embezzle, money laundering, conspiracy to\n Candace Allen, Brenda Serrato, and commit money laundering, Medicaid fraud,\nLawrence Valdez, Weber County Section 8 and conspiracy to commit Medicaid fraud\ntenants, were arrested in Salt Lake City, UT, in connection with HHC operations.\non outstanding warrants for various charges Montecalvo was charged with additional\nincluding lewdness, theft, and drugs. counts of patient neglect for his role at HHC.\n As a result of their actions, HUD realized a\n loss of $14 million when Giordano defaulted\nOther Fraud/Crimes on both the CHC and EP HUD-insured\n mortgages. HUD continues litigation over\n Antonio Giordano, owner of Suburban the now defunct HHC $13 million insurance\nMortgage and four HUD-insured nursing\nhomes located in Rhode Island\nand known as Coventry Health\nCenter (CHC), Mount St. Francis\nHealth Center (MSFC), Edmunds\nPlace (EP), and Hillside Health\nCenter (HHC), and John\nMontecalvo, administrator of the\nabove nursing homes, were\nsentenced in U.S. District Court,\nProvidence, RI, for their earlier\nguilty pleas to equity skimming.\nGiordano was sentenced to 30\nmonths incarceration and 24\nmonths supervised release,\nordered to pay the U.S.\nTreasury Department $780,539\nrestitution jointly and severally\nwith Montecalvo, and fined\n$100,000. Montecalvo was\nsentenced to 24 months\nincarceration and 24 months\nsupervised release. Giordano,\nMontecalvo, and others illegally\ndiverted income or funds from\nthe nursing homes to themselves Copyright, 2006. The Journal Medical, Providence,\n RI. Reprinted with permission.\n\n\nHUD\xe2\x80\x99s Multifamily Housing Programs 83\n\x0c payment, and MSF, with a $9.7 million laundering, and perjury for diverting more\n HUD-insured mortgage, continues than $110,000 in BHA project rents and other\n operations while listed for sale. In addition, funds while BHA\xe2\x80\x99S HUD-insured mortgage\n the Suburban Mortgage portfolio contains was in default and during BHA\xe2\x80\x99S Chapter\n approximately 57 HUD-insured loans 11 bankruptcy. As a result, HUD realized\n estimated at $314.3 million, all of which are losses in exceeding $1.6 million.\n considered at risk. HUD\xe2\x80\x99s Office of \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n General Counsel announced the suspension\n of Giordano, Montecalvo, and 17 affiliates. Longley-Jones Management Corp-\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b oration (LJMC), a manager of commercial\n and residential properties, was sentenced in\n Kevin Rice and Jimmy Keel, contractors U.S. District Court, Syracuse, NY, to a $4\n for Burchwood Harbor Apartments (BHA), million fine for its earlier guilty plea to\n a HUD-insured multifamily project, signed conspiracy to violate the Clean Air Act and\n pretrial diversion agreements of 6 months mail fraud. The sentencing orders LJMC to\n deferred adjudication in U.S. District Court, use $3 million for proper asbestos abatement\n Hot Springs, AR. Rice and Keel admitted and implementation of an environmental\n to bankruptcy fraud and conspiracy when compliance plan and remit the remaining $1\n they perjured themselves during a BHA million to the U.S. Government. Between\n Bankruptcy Rule 2004 examination. Rice 1990 and November 2005, at HUD-insured\n and Keel admitted that Rodney Myers, and other properties, LJMC, through\n owner of BHA, and others induced their its supervisory employees, knowingly\n perjury in their Bankruptcy Rule 2004 stripped, bagged, removed, and disposed of\n examinations by convincing them to falsely regulated asbestos material in a manner that\n state that they received BHA funds for work did not comply with the Clean Air Act work\n they performed. Myers previously pled practice standards.\n guilty to bankruptcy fraud, money\n\n\n\n\n84 HUD\xe2\x80\x99s Multifamily Housing Programs\n\x0c Chapter 5\nHUD\xe2\x80\x99\nHUD\xe2\x80\x99ss Community Plannin\n Planningg\nand De\n Devvelopment Pr\n Proog rams\n\x0c The Office of Community Planning and auditee, the majority of the reviews were to\n Development (CPD) seeks to develop viable determine whether the grant funds were\n communities by promoting integrated administered for eligible activities and that\n approaches that provide decent housing, they met overall agreements. The\n suitable living environments, and expanded following section illustrates the audits\n economic opportunities for low- and conducted in the CPD area.\n moderate-income persons. The primary\n means toward this end is the development\n of partnerships among all levels of\n Community DeDevvelopment\n government and the private sector. Block Grant Pr\n Block ogram\n Pro\n Audits HUD OIG audited the Municipality of\n Toa Baja\xe2\x80\x99s, Toa Baja, PR, Section 108 Loan\n During this reporting period, OIG Guarantee Assistance program. The\n issued 1 internal and 10 external audit Municipality did not manage two program\n reports in the CPD program area. These activities in an economical, efficient, and\n reports disclosed more than $11 million in effective manner. It paid more than $4.8\n questioned costs and nearly $4 million in million for two activities in which the\n recommendations that funds be put to intended benefits and compliance with\n better use. CDBG national objectives were not met and\n paid more than $70,000 for unreasonable/\n OIG audits the Community unnecessary expenditures. In addition, the\n Development Block Grant (CDBG) program, Municipality did not maintain adequate\n Supportive Housing Program Grant, records to demonstrate that it complied with\n HOME, and Special Purpose Grants environmental review procedures\n program. While OIG\xe2\x80\x99s objectives varied by associated with the construction of the Toa\n\n A Look Bac\n Backk ffor\n or the Year\n Year\n Char\n Chartt 5.1: Per centa\n Percenta ge of OIG Community Plannin\n centag g and De\n Planning velopment Closed Audit\n Dev\n Cases\n Cases,, Perfor\n Perfor med FY 06\n ormed\n Region 1\n Boston\n Region 5 11%\n Chicago\n Region 7-8\n 21% Region 2\n Kansas City\n 0% New York\n 16%\n\n\n\n\n Region 3\n Philadelphia\n 5%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 26% Atlanta\n Region 6 16%\n Fort Worth\n 5%\n\n\n\n86 HUD\xe2\x80\x99s Community Planning and Development Programs\n\x0c assessed and supported. (Audit Report:\n 2006-AT-1019)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n HUD OIG audited the Municipality of\n Humacao\xe2\x80\x99s, Humacao, PR, CDBG program.\n The Municipality\xe2\x80\x99s financial management\n system did not properly identify the\n application of more than $1.2 million in\n program income, did not properly allocate\n almost $316,000 in administrative salaries,\n allowed the use of almost $67,000 for\n ineligible expenditures, and could not\n account for nearly $80,000 in CDBG receipts.\n In addition, the Municipality awarded 12\n contracts without following HUD\n procurement requirements, did not support\n the reasonableness of $1.9 million in CDBG\n contracts, and paid almost $103,000 for\n excessive or unnecessary expenditures.\n Picture of the front of the public library. The\n library is beneath a deteriorated water tower Further, the Municipality did not maintain\n and has no parking facility. adequate records to demonstrate that\n activities met at least one of the three CDBG\nBaja public library. As a result, HUD has no national objectives. Therefore, the intended\nassurance that requirements were met or benefits and compliance with the CDBG\nwhether potential findings or concerns were national objectives and related expenditures\nproperly addressed. totaling nearly $212,000 are unsupported.\n\n OIG recommended that HUD require OIG recommended that HUD require\nthe Municipality to (1) develop and the Municipality to repay almost $103,000\nimplement a corrective action plan to in excessive costs and nearly $67,000 in\neliminate safety hazards and ensure that the ineligible operating expenditures; provide\npublic library meets a national objective or all supporting documentation showing the\nrepay $3.8 million used for its construction, appropriateness and eligibility of $3.8\n(2) provide all supporting documentation million in CDBG disbursements; develop\nshowing that it obtained HUD approval to and implement an internal control plan to\nchange the purpose and scope of the ensure that the CDBG program has (1) a\nCandelaria multipurpose center or repay $1 financial management system that complies\nmillion used for its construction, (3) repay with HUD requirements, (2) procurement\nmore than $70,000 in unreasonable/ procedures that ensure goods and services\nunnecessary cost for repairs at the public are obtained at the most advantageous terms\nlibrary, (4) develop and implement an and in a manner providing full and open\ninternal control plan to ensure that the Loan competition, and (3) procedures that ensure\nGuarantee Assistance program has funded activities meet at least one of the\nprocedures that ensure funded activities CDBG national objectives; and ensure that\nprovide the intended benefits to the CDBG expenditures are properly accounted\ncommunity and meet at least one of the for, reconciled with HUD\xe2\x80\x99s disbursement\nCDBG national objectives and system, and in compliance with HUD\nenvironmental review procedures that requirements. (Audit Report: 2006-AT-\nensure funded activities are properly 1016)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\nHUD\xe2\x80\x99s Community Planning and Development Programs 87\n\x0c HUD OIG is conducting ongoing audits County also extended the payoff date for two\n of the Lower Manhattan Development CDBG float-funded activities without\n Corporation\xe2\x80\x99s administration of the CDBG properly identifying the loan extensions as\n Disaster Recovery Assistance funds, which a new activity as required.\n were provided to the State of New York as a\n result of the September 11, 2001, terrorist OIG recommended that HUD require\n attacks on the World Trade Center in New the County to (1) reimburse its CDBG and/\n York City. The Corporation disbursed $129.7 or repay HUD from nonfederal funds for\n million of these funds during the audit more than $67,000 in expenses related to\n period of October 1, 2005, through March ineligible administrative activities, (2)\n 31, 2006. establish and implement adequate\n procedures for charging administrative costs\n The Corporation generally disbursed that meet federal requirements, and (3)\n Disaster Recovery Assistance funds in establish and implement adequate\n accordance with the HUD-approved action procedures for its float loan program. (Audit\n plans. The Corporation also expended the Report: 2006-SE-1003)\n funds for eligible planning and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n administrative expenses in accordance with\n applicable laws and regulations and HUD OIG audited the City of Modesto\xe2\x80\x99s,\n maintained a financial management system Modesto, CA, Park, Recreation, and\n that adequately safeguarded the funds. Neighborhood Services Division. The City\n However, weaknesses in the Corporation\xe2\x80\x99s did not adequately administer its grant. OIG\n control procedures permitted nearly recommended that HUD require the City to\n $187,000 to be misclassified in HUD\xe2\x80\x99s Line (1) reduce the loan balances for loan\n of Credit Control system, resulting in recipients who were charged nearly $65,000\n charges to the wrong programs. In addition, for unreasonable and unnecessary\n a consultant was reimbursed at incorrect rehabilitation costs; (2) review all additional\n rates, resulting in a $3,000 overpayment. loans related to rehabilitation work carried\n out after June 2005 to determine the\n OIG recommended that HUD require reasonableness of costs charged for the work\n the Corporation to (1) reclassify costs and reduce the recipient loan balances for\n totaling nearly $187,000 to the appropriate any identified overcharges; (3) implement a\n HUD Line of Credit Control System budget procurement system that meets federal\n line item, (2) reimburse more than $3,000 to requirements, (4) develop an adequate\n the World Trade Center Memorial and quality control system to ensure proper\n Cultural program, and (3) strengthen monitoring of contractor charges,\n controls to ensure that consultants are rehabilitation work, and work progress; and\n reimbursed in accordance with the terms of (5) provide evidence that it now complies\n agreements. (Audit Report: 2006-NY-1013) with its own underwriting requirements\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b regarding verification of income and\n assistance eligibility for loan applicants.\n HUD OIG audited the HOME and (Audit Report: 2006-LA-1019)\n CDBG programs of the Snohomish County \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Office of Housing and Community\n Development in Everett, WA. Snohomish HUD OIG audited the 2004 CDBG\n County generally administered its CDBG Disaster Recovery Assistance funds\n and HOME Investment Partnerships provided to the State of Florida. The State\n Program grants in accordance with HUD awarded and disbursed the 2004 CDBG\n requirements. However, the County Disaster Recovery Assistance funds in\n charged more than $67,000 in ineligible accordance with HUD requirements.\n administrative expenses to its CDBG. The However, program files lacked evidence that\n\n88 HUD\xe2\x80\x99s Community Planning and Development Programs\n\x0cthe State verified whether recipients used ensure that (1) grantees receiving Grant\nthe funds for activities reimbursed by the funds above a HUD-established minimum\nFederal Emergency Management Agency threshold record liens showing HUD\xe2\x80\x99s\n(FEMA), Small Business Administration interest in assisted properties, (2) grantees\n(SBA), or other sources. As a result, the place covenants on properties\xe2\x80\x99 titles assuring\nopportunity existed for a recipient to receive nondiscrimination, (3) grantees properly\nfunding for the same activity from several complete required application forms and\nsources. documentation for Grant awards, (4) Grant\n funds are appropriately used, and (5) Grant\n OIG recommended that HUD require funds are properly disbursed. OIG also\nthe State to develop and implement recommended that HUD strengthen\nprocedures to ensure that CDBG disaster existing procedures and controls over the\nrecovery funds will not be used for activities Grant agreement template review to ensure\nreimbursed by FEMA, SBA, or any other that citations to requirements are accurate.\nprogram or source and maintain supporting (Audit Report: 2006-CH-0003)\ndocumentation in its files. (Audit Report:\n2006-AT-1014) Suppor ti\n tivve Housin\n Supporti g\n Housing\nSpecial Purpose Grants\n Purpose Pr\n Proogram Grant\n HUD OIG audited the Institute for\n HUD OIG audited HUD\xe2\x80\x99s oversight of\nEconomic Development Initiative \xe2\x80\x93 Special Urban Research and Development, located\nPurpose Grants appropriated for fiscal years in El Monte, CA, in response to a citizen\xe2\x80\x99s\n2002 through 2005 to determine the complaint. The objective of the audit was to\nadequacy of HUD\xe2\x80\x99s application and award determine whether the complainant\xe2\x80\x99s\nprocessing and monitoring of the Grants. allegations had merit and whether the\n Institute administered its Supportive\n HUD did not require grantees to place Housing Program grants in accordance with\nliens on assisted properties\xe2\x80\x99 titles to protect pertinent requirements.\nHUD\xe2\x80\x99s interests. It also did not ensure that\ngrantees placed covenants on assisted The Institute claimed to have spent\nproperties\xe2\x80\x99 titles assuring nondiscrimination almost $109,000 in grant funds for allocated\nand that Grant funds were appropriately supportive housing and corporate office\nused according to its agreements with expenses that were not documented. In\ngrantees. Of 105 Grants reviewed, HUD did addition, it could not provide support for\nnot ensure that 71 grantees submitted more than $181,000 in required matching\nrequired forms and documentation for funds for three of the grants.\nappropriate monitoring and nine grantees\nproperly completed and submitted required OIG recommended that HUD require\napplication and award forms and the grantees to (1) provide adequate\ndocumentation. HUD could not support supporting documentation for almost\nthat four grantees submitted required $109,000 in unsupported expenses or repay\nsemiannual progress reports and three it from nonfederal funds and (2) provide\ngrantees submitted certifications regarding adequate supporting documentation that\nlobbying and that it approved two grantees\xe2\x80\x99 more than $181,000 in required matching\nenvironmental release of funds before funds was provided or repay the $1.1 million\ndisbursing Grant funds. balance of grant funds expended. (Audit\n Report: 2006-LA-1015)\n OIG recommended that HUD improve\nits existing procedures and controls to\n\nHUD\xe2\x80\x99s Community Planning and Development Programs 89\n\x0c HOME\n HUD OIG audited the Commonwealth\n of Virginia\xe2\x80\x99s HOME Investment\n Partnerships program to determine whether\n the Commonwealth\xe2\x80\x99s Department of\n Housing and Community Development\n properly administered its HOME program.\n\n The Commonwealth did not always\n comply with federal regulations and/or its\n own requirements in its disbursements and\n administration of HOME funds for various\n purposes. As a result, HOME funds totaling\n almost $184,000 were used for ineligible\n expenses or activities, and more than\n $527,000 in expenses were unsupported.\n The Commonwealth also accumulated more\n than $3.2 million in administrative funds\n that should have been used to improve its\n administration of its HOME program and\n to fund additional eligible HOME projects.\n\n OIG recommended that HUD require\n the Commonwealth to (1) recover almost\n $184,000 it spent on ineligible expenses and\n provide support for more than $527,000 in\n expenses or repay that amount to the HOME\n program, (2) use the accumulated $3.2\n million in administrative funds to improve\n its monitoring program and recommit any\n excess funds to eligible HOME projects, and\n (3) create and implement procedures to\n ensure that HOME funds are disbursed and\n used in compliance with applicable\n regulations. (Audit Report: 2006-PH-1013)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n90 HUD\xe2\x80\x99s Community Planning and Development Programs\n\x0cInvesti\nInv gations\n estig Some investigations discussed in this re-\n port were conducted by the OIG or jointly\n During this reporting period, OIG with federal, state, and local law\nopened 42 investigative cases and closed 31 enforcement agencies. The results of our\ncases in the CPD program area. Judicial more significant investigations are\naction taken on these cases during the described below.\nperiod included $4,617,997 in investigative\nrecoveries, $7,025,433 in funds put to better Theft/Embezzlement\n heft/Embezzlement\nuse, 23 indictments/informations, 25\nconvictions/pleas/pretrial diversions, 17 Gary Jojuana Meeks, executive director\nadministrative actions, 1 civil action, 2 for HUD-funded Gary Urban Enterprise\npersonnel actions, and 17 arrests. Association (GUEA), and Charmaine\n Pratchett, fiscal director for GUEA, were\n Char\n Chartt 5.2: Community Plannin\n Planning g and each charged in U.S. District Court, Gary,\n De\n Devv elopment Recov\n Recov eries IN, with embezzlement, conspiracy, and\n mail fraud. Meeks and Pratchett allegedly\n Contract Fraud embezzled more than $750,000 in GUEA\n 9% ($530,925)\n False Statements Davis Bacon funds by misusing the GUEA credit card,\n 79% ($4,720,516) 6% ($340,000)\n receiving excessive wages, and diverting\n GUEA funds to a personal bank account and\n used GUEA funds for real estate,\n automobiles, clothing, home furniture,\n restaurants, vacations, and personal\n Embezzlement\n 6% ($384,615)\n expenses.\nTotal Recoveries $4,617,997 \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n A Look Back ffor\n Back or the Year\n Year\n Char\n Chartt 5.3: Per centa\n Percenta ge of OIG Community Plannin\n centag g and De\n Planning velopment Closed\n Dev\n Investi\n Inv gation Cases\n estig Cases,, Perfor med FY 06\n ormed\n Perfor\n Region 1\n Boston\n Region 5 3%\n Chicago\n Region 7-8\n 14% Region 2\n Kansas City\n 11% New York\n 22%\n\n\n\n\n Region 3\n Philadelphia\n 11%\n\n\n\n\n Region 9-10\n Los Angeles Region 4\n 3% Atlanta\n Region 6 8%\n Fort Worth\n 28%\n\n\n\nHUD\xe2\x80\x99s Community Planning and Development Programs 91\n\x0c Carol Aranjo, the former executive and cash obtained through fraudulent acts\n director of D. Edward Wells Federal Credit alleged in the indictment. In addition to the\n Union (DEWFCU), along with her spouse above defendants, Mary Spruell, former\n and son, Alphonso and Douglas Smith, were treasurer of DEWFCU and owner/manager\n indicted in U.S. District Court, Springfield, of Walnut Street Apartments, pled guilty to\n MA, on conspiracy, embezzlement, bank an information charging her with\n fraud, federal program fraud, and various embezzlement of monies and funds, aiding\n tax code violations. Aranjo and Alphonso and abetting, and subscribing to false federal\n and Douglas Smith allegedly embezzled income tax returns. Spruell embezzled more\n more than $1.18 million from DEWFCU, than $109,000 from DEWFCU, including\n including more than $65,000 from Walnut more than $65,000 from Walnut Street\n Street Apartments, a HUD-insured Apartments. Terms of her plea agreement\n multifamily project; allegedly submitted include the forced sale of Walnut Street\n fraudulent bids to secure $522,340 from the Apartments to repay HUD for unauthorized\n City of Springfield HUD HOME program; distributions, excessive management fees,\n allegedly embezzled more than $10,000 from and court ordered restitution. As a result\n the City of Springfield HUD HOME of their actions, HUD\xe2\x80\x99s losses are estimated\n program through D.A.T. Construction, a at $360,000.\n company owned by Alphonso and Douglas \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Smith; and allegedly embezzled HUD-\n insured mortgage funds by failing to pay Leroy Brown, a former Salvation Army\n mortgage loans on properties securing new financial manager, pled guilty in U.S.\n Federal Housing Administration (FHA)- District Court, Newark, NJ, to conspiracy\n insured mortgages. The indictment also for theft from an organization receiving\n contains a forfeiture count for all property federal benefits and federal income tax\n\n\n\n\n Copyright, 2006. The Republican, Springfield, MA. Reprinted with permission.\n\n\n92 HUD\xe2\x80\x99s Community Planning and Development Programs\n\x0cevasion. Susan Bigelow, a City of Newark Thrower, ADH HIV Services program\nDepartment of Finance employee, was administrator, established a nonprofit\nsentenced to 10 months incarceration and 2 corporation called B\xe2\x80\x99MON, Inc. Blackmon\nyears probation and ordered to pay the and Thrower directed others to write checks\nSalvation Army $385,760 for her previous from numerous HUD-funded subgrantee\nguilty plea to conspiracy to steal federal accounts to B\xe2\x80\x99MON, created phony invoices\nprogram funds. Brown, while working at a and receipts, and used pilfered federal funds\nNewark branch of the Salvation Army, for personal expenses, to include the\nembezzled $385,760 from a Salvation Army purchase of a $5,000 diamond ring.\nbank account, funded in part with HUD \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nHousing Opportunities for Persons with\nAIDS (HOPWA) program funds, by creating Mark Marcucilli, Assistant Director of\nfraudulent client files, check request forms, Housing Management for New York State\nand court documents to support the Division of Housing and Community\nissuance of bogus landlord payments to Renewal; Fred Marcucilli, father of Mark\nBigelow. Bigelow received payments from Marcucilli; and Carmine Carpinone each\nBrown for cashing more than $300,000 in pled guilty in U.S. District Court, New York,\nfederal program checks, including checks NY, to numerous counts of conspiracy to\nfrom FEMA and HUD\xe2\x80\x99s HOPWA program. commit mail fraud and theft of government\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b funds. Mark Marcucilli, Fred Marcucilli,\n and Carpione conspired to obtain Lower\n Herbert Bagley, an insurance broker for Manhattan Development Corporation funds\nHoward and Stuart Associates, Inc., pled by falsely claiming residences in the lower\nguilty in U.S. District Court, Norristown, Manhattan World Trade Center area. HUD\nPA, to numerous counts of mail fraud, provided $2.7 billion for the Corporation, an\nbribery, conspiracy, bank fraud, filing a false organization created to coordinate the\nfederal income tax return, and honest service rebuilding and revitalization of lower\nmail fraud. From 2002 through 2005, Bagley Manhattan after the September 11, 2001,\npaid bribes to Theodore LeBlanc, the terrorist attacks.\npreviously convicted former mayor of \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nNorristown, PA, to obtain Norristown\nBorough\xe2\x80\x99s insurance contracts and other Terry Lynn Miller, the former executive\npayments financed with HUD CDBG director of Suffolk Shelter for the Homeless\nprogram funds. As a result, HUD realized (SSH), a HUD-funded organization, was\nlosses of $200,000. sentenced in U.S. District Court, Norfolk,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b VA, to 6 months home detention and 3 years\n probation and ordered to pay SSH $20,117\n Malik Blackmon, former minority AIDS restitution for her previous guilty plea to\ninitiative coordinator for Positive Voices, a federal program fraud. Miller used SSH\nnonprofit corporation and subgrantee of funds and credit to personally obtain a\nfederal funds administered by Arkansas laptop computer, computer software, digital\nDepartment of Health (ADH), entered into camera, medical lift chair, YMCA family\na pretrial diversion agreement in U. S. membership, and gasoline and to pay\nDistrict Court, Little Rock, AR. Blackmon $17,238 in wages to her daughter, although\nadmitted to theft of federal grant money and her daughter was not an SSH employee. As\nin return for 12 months deferred a result, HUD realized a loss of $23,889;\nadjudication, agreed to perform 60 hours of Miller paid the court $20,117 restitution as\ncommunity service and forfeit a diamond ordered.\nring seized by the government. Blackmon\nand his wife, formerly indicted Lola\n\n\nHUD\xe2\x80\x99s Community Planning and Development Programs 93\n\x0c Other Fraud/Crimes funds totaling $692,500 and $300,000,\n respectively, returned $422,425 in SFARG\n funds to ESDC.\n Following a \xe2\x80\x9cQui Tam\xe2\x80\x9d complaint, a $2 \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n million settlement agreement was reached\n between the United States Attorney\xe2\x80\x99s Office, Chang Sheng Yu, a Chinese national and\n Indianapolis, IN, and Phoenix Fabricators president of American McKinley Venture\n and Erectors, Inc. Phoenix received HUD Management, Inc., pled guilty during his\n CPD and U.S. Department of Agriculture trial in U.S. District Court, New York, NY,\n (USDA) program funds to weld steel water to theft of government funds, mail fraud, and\n storage tanks throughout the United States submission of false Social Security numbers\n In 1996, Phoenix began generating false (SSN) for his role in a scheme to defraud\n testing records to show that installed tanks HUD and Empire State Development\n met contractual standards, causing the Corporation (ESDC) of $118,876 in federal\n submission of false claims to HUD and grant money. Yu falsely obtained a BRG and\n USDA for payments. According to the attempted to obtain an SFARG through\n consent judgment, the U.S. Department of ESDC. ESDC, a HUD-funded nonprofit\n Justice (DOJ) and the \xe2\x80\x9cQui Tam Realtor\xe2\x80\x9d will established to provide assistance to\n receive $1.75 million, with the remaining businesses in lower Manhattan after the\n $250,000 designated for mandatory September 11, 2001, terrorist attacks,\n extended warranties on all tanks established BRG and SFARG programs after\n constructed during the relevant period. receiving a $700 million appropriation from\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n HUD.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Anthony and Teresa Auyer each pled\n guilty in U.S. District Court, Chattanooga, Roderick Caston, a former member of the\n TN, to conspiracy, bank fraud, and mail City of Shreveport Zoning and Appeals Board,\n fraud charges. Anthony and Teresa Auyer was sentenced in U.S. District Court,\n received a HUD CDBG loan through Shreveport, LA, to 12 months confinement\n Tennessee Department of Economic and and 3 years supervised release and ordered to\n Community Development to purchase pay City of Shreveport Department of\n lumber mill equipment. The Auyers Community Development (SDCD) $107,000\n submitted phony invoices, showing lumber restitution for his earlier guilty plea to theft of\n mill equipment purchases, but never government funds. Caston applied for and\n purchased lumber mill equipment and received HUD CDBG funds through the\n failed to repay the CDBG loan. As a result, SDCD Small Business Loan Program to\n HUD realized a loss of $458,821. construct a carwash business in downtown\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Shreveport, then diverted loan proceeds at\n closing through two vendors. The vendors\n HUD OIG received and probed funneled back to Caston most of the borrowed\n allegations of unfair grant distributions by money, which he used for personal expenses.\n Empire State Development Corporation As a result, HUD realized a loss of $107,144.\n (ESDC), New York, NY, a HUD-funded \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n nonprofit created to administer and distribute\n Small Firm Attraction and Retention Grants John J. Walsh, doing business as J. Walsh\n (SFARG) and Business Recovery Grants and Sons Building and Remodeling, was\n (BRG) for redevelopment of lower sentenced in U.S. District Court,\n Manhattan after the September 11, 2001, Springfield, MA, to 6 months confinement\n terrorist attacks. As a result, Dart Courier at a community corrections center, 6 months\n Service, the recipient of SFARG and BRG house arrest with electronic monitoring, 3\n\n\n94 HUD\xe2\x80\x99s Community Planning and Development Programs\n\x0cyears probation, and 200 hours of fictitious children, and receiving additional\ncommunity service for his previous benefits for children not in her custody. In\nconviction on false statements to a federal addition to the above charges, Thompson\nagent and perjury charges. Walsh provided pled guilty to previous charges of theft by\nfalse statements to a federal grand jury and deception and was sentenced to an\nfederal agents when questioned about his additional 3 years incarceration (to be served\nrole in the laundering through his business concurrently with her above imprisonment)\nof HUD CDBG funds earmarked for the for fraudulently receiving $105,121 in state\nFa\xc3\xa7ade program, a program providing and/or federal funds and benefits. As a\nfunding for renovations at specific result of her actions, HUD realized a loss of\nrestaurants in Springfield, MA. $23,069.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Harry Diaz pled no contest in Seventh James Thomas Jr., owner of Thomas\nJudicial Circuit Court, Deland, FL, to Wrecking, was sentenced in U.S. District\ncharges of grand theft. Diaz was placed on Court, St. Louis, MO, to 60 days home\n36 months probation and ordered to pay confinement and 3 years probation for his\n$1,400 restitution to Health Planning earlier guilty plea to tax evasion. Thomas\nCouncil of Northeast Florida (HPCNEF), a admitted using his company as a \xe2\x80\x9cfront\xe2\x80\x9d for\nnonprofit organization and subrecipient Spiritas Wrecking to satisfy St. Louis\ncontracted to administer HUD HOPWA Community Development (SLCD)\nfunding. Diaz used the identity of another regulations regarding minority business\nincarcerated but active participant in the participation in the $8 million renovation of\nHOPWA program, forged his signature on the old St. Louis City Hospital. Thomas\na HPCNEF rental assistance contract funneled Spiritas Wrecking payroll checks\nagreement and checks issued by HPCNEF, through Thomas Wrecking to create the\nand deposited HPCNEF checks totaling fa\xc3\xa7ade that a minority contractor\n$1,400 into his personal account. participated in the SLCD project as certified.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n Lori Thompson, also known as Lori Michael Caridi, president and owner of\nHyman; Lori Gribbin; Christine Hyman; SRC Industries, pled guilty in Rockland\nSuzanne O\xe2\x80\x99Leary; and/or April Atkinson, a County Court, New City, NY, to falsifying\nformer Shelter Plus Care Section 8 tenant business records and offering false\nthrough Shalom House, a HUD CPD- instruments for filing. Joseph Rotonde, vice\nfunded housing assistance program, pled president of SRC, and Orry Osinga, a\nguilty in Cumberland County Court, subcontractor for SRC, each pled guilty to\nPortland, ME, to theft by deception and charges of offering false instruments for\naggravated forgery. Thompson was filing. SRC, a general contractor for Jawanio,\nsentenced to 10 years incarceration (5 years a HUD-funded nonprofit created to build\nsuspended) and 3 years supervised housing for developmentally disabled\nprobation for defrauding HUD and State of adults, falsified payrolls submitted to HUD\nMaine Health and Human Services by and failed to pay employees Davis-Bacon\ncreating false identities, failing to report wages as agreed.\ntenants and income, creating identifies for\n\n\n\n\nHUD\xe2\x80\x99s Community Planning and Development Programs 95\n\x0c\x0c Chapter 6\nHur ricane Relief Ov\nHurricane Over si\n ersi\n er ght\n sight\n\x0c HUD Authorized CPD Funds to Gulf Coast Region\n Region\n\n\n\n\n Florida\n $182 Million\n\n\n\n\n Alabama\n $95.6 Million Mississippi\n $5.481 Billion\n\n\n\n\n Louisiana Texas\n $10.41 Billion $503 Million\n\n\n\n\n98 Hurricane Relief Oversight\n\x0c\xe2\x80\x9cWe learned from our 9-11 efforts that to be effective, your teams on\nthe ground and at headquarters must be proactive rather than reactive.\nAlthough a basic concept, it is one that is key to the ability to make a\nreal impact. This proactive posture extends to collaboration.\nRebuilding and redevelopment must happen cooperatively with state\nagencies that know their communities and citizens\xe2\x80\x99 needs.\xe2\x80\x9d\nRemarks made by Inspector General Kenneth M. Donohue testifying before the\nUnited States House of Representatives on May 10, 2006, in Washington, DC.\n\n\nIntr oduction and\nIntroduction\nBac\nBackkground\n During the Office of Inspector General\xe2\x80\x99s vouchers. During the current reporting\n(OIG) last semiannual reporting period, period ending September 30, 2006, Congress\nCongress approved $11.5 billion to the U.S. approved an additional $5.2 billion to the\nDepartment of Housing and Urban HUD Community Development Block Grant\nDevelopment (HUD) to assist five Gulf (CDBG) program for the five Gulf Coast\nCoast states with restoration and recovery states for necessary expenses related to\nfrom the 2005 hurricane season, and an disaster relief, long-term recovery, and\nadditional $390 million for housing restoration of infrastructure in the most\n\nHurricane Relief Oversight 99\n\x0c impacted and distressed areas related to the 119 housing choice vouchers\n consequences of Hurricanes Katrina, Rita, and 1,721 disaster vouchers\n and Wilma. As requested by President issued by HANO.\n Bush, HUD allocated the State of Louisiana\n the statutory maximum $4.2 billion, making KDHAP transitioned by\n $973 million available to address the disaster HUD to Disaster Voucher\n recovery needs of Alabama, Florida, Program (DVP).\n Mississippi, and Texas. HUD Single-Family Real Estate\n Owned (REO) Properties\n HUD conducted panel meetings with\n the other Gulf Coast states to discuss $29 million advanced to HUD-\n allocation requests and unmet needs. contracted management and\n Secretary Jackson announced emergency marketing firms.\n CDBG funding allocations for the remaining\n 6,500 houses taken off the\n four Gulf States as follows: Texas - $428\n million, Mississippi - $423 million, Alabama market for rehabilitation and\n - $21 million, and Florida - $100 million. In use by evacuees in 11 states.\n addition, HUD opened 20 new homes in the 2,600 houses readied for\n old Fischer development in the New Orleans evacuee housing.\n area and has worked to redevelop other\n public housing developments to REO properties offered for\n accommodate returning residents. HUD sale to evacuees at a\n also contributed $500,000 to the New discount.\n Orleans\xe2\x80\x99 Neighborhoods Rebuilding Plan or HUD Public and Indian Housing\n \xe2\x80\x9ccharrette\xe2\x80\x9d process, which is a community- Disaster Voucher Program\n driven effort to help guide the revitalization\n of the city\xe2\x80\x99s neighborhoods that addresses $390,299,500 funded directly to\n each community\xe2\x80\x99s priorities and plans. HUD.\n\n The following list provides updates on Portable Section 8 vouchers.\n Federal Emergency Management Agency Program to expire\n (FEMA) disaster relief, mission September 30, 2007.\n assignments, and CDBG funding to the five\n Gulf Coast states: Sypnosis of Approved Plans for Gulf\n Coast States\xe2\x80\x99 CDBG Disaster Recovery\n HUD Public and Indian Housing, Assistance\n Katrina Disaster Housing Assistance\n Louisiana\n Program (KDHAP)\n $10.410 billion in total\n $79 million funded to HUD Disaster Recovery\n by FEMA to relocate almost Assistance funding.\n 102,000 families in Presidential\n Declared Disaster Area (PDDA). Primary administering\n agencies: Louisiana\n Evacuees relocated by Recovery Authority (LRA)\n public housing agencies in and State of Louisiana,\n 44 states. Office of Community\n 14,000 families relocated by Development (OCD).\n the Housing Authority of The Road Home Housing\n New Orleans (HANO). Program - $8.062 billion.;\n\n\n100 Hurricane Relief Oversight\n\x0c $6.347 billion earmarked for Ratepayer and Wind\n the Homeowner Assistance Pool Mitigation\n Program. Programs - $410 million.\n Additional HUD approved Gulf Coast Regional\n action plans: Infrastructure Program -\n $500 million.\n Restoration of homeless\n housing shelter capacity Economic Development\n - $26 million. and Community\n Revitalization Program -\n Workforce and\n $300 million, under\n Affordable Rental\n discussion with HUD.\n Housing Program -\n $1.536 billion. Additional action plans are\n under development by the\n Other developer\n state.\n incentives - $21 million.\n Texas\n Local Government Code\n Enforcement Program - $503,194,849 in Disaster\n $11 million. Recovery Assistance\n funding.\n Economic development\n programs - $332.5 Primary administering\n million. agencies: Texas Department\n of Housing and Community\n Administration - $189.9\n Affairs (TDHCA) and Office\n million.\n of Rural Community Affairs\n Additional action plans are (ORCA).\n under development by the\n Housing, infrastructure,\n state.\n public service, and public\n Mississippi facility - $74.5 million.\n\n $5,481,036,059 in Disaster Additional action plans are\n Recovery Assistance under development by the\n funding. state.\n\n Primary administering Florida\n agency: Mississippi\n $182,970,518 in Disaster\n Development Authority\n Recovery Assistance\n (MDA)\n funding.\n Additional HUD approved\n Primary administering\n action plans:\n agency: Florida Department\n Homeowner Assistance of Community Affairs,\n Grant Program - $3.26 Division of Housing and\n billion. Community Development.\n Public Housing Program Housing, infrastructure, and\n - $105 million. durable construction - $82.9\n million.\n\n\n\nHurricane Relief Oversight 101\n\x0c Additional action plans are\n under development by the\n Audits\n state. During this period, OIG issued two\n Alabama external reports and one internal report on\n the Gulf Coast disaster area. These reports\n $95,613,574 in Disaster disclosed more than $97,000 in questioned\n Recovery Assistance costs and made recommendations to ensure\n funding. that HUD maintains complete and\n compliant contract files.\n Primary administering\n agency: Alabama\n The HUD OIG Office of Audit\n Department of Economic\n responded quickly to establish an office for\n and Community Affairs\n Hurricane Katrina oversight to prepare for\n (ADECA).\n the long process of recovery. The Office of\n Housing, infrastructure, and Audit and HUD are not generally first\n economic development - responders; however, the Office of Audit\n $74.4 million. established an office, developed an audit\n plan, and begun some reviews in the disaster\n Additional action plans are areas. Currently, the Hurricane Recovery\n under development by the Audit Operations Division in New Orleans\n state. is staffed by five permanent employees and\n five additional auditors are detailed from\n other HUD OIG regional offices. In addition,\n the Office of Audit is in the process of hiring\n six more auditors to be located in Louisiana\n and Mississippi.\n\n The Office of Audit\xe2\x80\x99s initial assignment\n was to evaluate HUD\xe2\x80\x99s use of REO properties\n to house disaster evacuees. It also has\n performed an audit of the more than $17\n million in contracts issued for disaster-\n related procurement activities. The\n Hurricane Recovery Audit Operations\n Division is now starting reviews of\n Mississippi\xe2\x80\x99s and Louisiana\xe2\x80\x99s homeowners\n programs. These programs are funded from\n HUD\xe2\x80\x99s emergency supplemental\n appropriations of approximately $17 billion.\n These reviews are timely and will assist in\n establishing a presence and acting as a real-\n time deterrent to waste and abuse in HUD\xe2\x80\x99s\n activities. The results of OIG\xe2\x80\x99s completed\n Gulf Coast disaster area audits are described\n below.\n\n\n\n\n102 Hurricane Relief Oversight\n\x0cFinal Audit Pr oducts\n Products Cityside Management Corporation,\n Hammond, Louisiana, Did Not Enforce the\nSouthwest Alliance of Asset Managers, Lease Terms over Payment of Property\nLLC, Addison, Texas, Did Not Effectively Utilities\nEnforce the Lease Terms over Payment of\nProperty Utilities HUD OIG audited Cityside\n Management Corporation, an M&M\n HUD OIG audited Southwest Alliance contractor for HUD REO properties held off\nof Asset Managers, LLC, a management and market for disaster victims. The audit was\nmarketing contractor (M&M) for HUD REO initiated in conjunction with PCIE, as part\nproperties held off market for disaster of its examination of relief efforts provided\nvictims. The audit was initiated in by the Federal Government in the aftermath\nconjunction with the President\xe2\x80\x99s Council on of Hurricanes Katrina and Rita. OIG\xe2\x80\x99s\nIntegrity and Efficiency (PCIE), as part of objective was to determine whether Cityside\nits examination of relief efforts provided by complied with HUD\xe2\x80\x99s regulations,\nthe Federal Government in the aftermath of procedures, and instructions in the\nHurricanes Katrina and Rita. OIG\xe2\x80\x99s management of HUD\xe2\x80\x99s REO properties held\nobjective was to determine whether off market for disaster victims.\nSouthwest Alliance complied with HUD\xe2\x80\x99s\nregulations, procedures, and instructions in Cityside complied with HUD\xe2\x80\x99s\nthe management of HUD\xe2\x80\x99s REO properties regulations, procedures, and instructions in\nheld off market for disaster victims. the management of HUD\xe2\x80\x99s REO properties\n held off market to house disaster victims,\n Southwest Alliance generally complied with one exception. It did not ensure that\nwith the terms of its M&M contract, with all disaster victims transferred the billing of\none exception. It did not effectively ensure property utility services into their names\nthat the disaster victims transferred the and paid charges for utility services in full,\nbilling of property utility services into their as required by the lease agreements.\nnames within 7 days of occupancy, as Instead, Cityside used almost $18,000 in\nrequired by the lease agreements. As a HUD funds to pay the monthly billings on\nresult, after occupancy by tenants, HUD 133 leased properties during the period\npaid more than $79,000 in utility costs for October 13, 2005, through March 31, 2006.\n636 leased properties during the period\nSeptember 2, 2005, through April 25, 2006. OIG recommended that HUD take\n appropriate action against the tenants who\n OIG recommended that HUD instruct do not comply with the instruction and\nSouthwest Alliance to take appropriate requirements regarding utility payments\naction against the tenants who do not and require Cityside to initiate collection\ncomply with the lease requirements over actions against tenants to recover almost\nutility payments and require Southwest $18,000 that HUD paid for utility costs and\nAlliance to initiate collection actions against any additional costs HUD incurred after\ntenants to recover the more than $79,000 March 31, 2006. (Audit Report: 2006-AO-\nHUD paid for utility costs. (Audit Report: 1002)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n2006-AO-1001)\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nHurricane Relief Oversight 103\n\x0c The Departments Did Not Maintain KDHAP Vouchers\n Complete Contract Files; Washington, DC\n HUD OIG has obtained access to FEMA\n HUD OIG audited HUD\xe2\x80\x99s emergency data relating KDHAP funds and is\n response contract award process as part of conducting a review of the issuance of the\n the OIG annual audit plan, along with funds.\n efforts to monitor Hurricanes Katrina and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n Rita disaster relief efforts. The objective was\n to evaluate the economy, efficiency, and Coordination with State Auditors\n effectiveness in the award of the contract\n funds for hurricane relief and recovery HUD OIG initially held meetings with\n efforts. the state auditors for the five states within\n the Gulf Coast region to discuss plans on\n HUD did not maintain complete files for how to coordinate the various audit efforts.\n contract actions that were awarded in Currently HUD OIG auditors are working\n response to disaster-related relief efforts. In with Louisiana and Mississippi auditors on\n 11 of the 13 contract files reviewed, coordination efforts.\n information was either missing or not \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n prepared in accordance with applicable\n regulations, policies, and procedures. As a\n result, HUD cannot be assured that contract\n files related to emergency contract actions\n were complete and in compliance with\n applicable regulations, policies, and\n procedures.\n\n OIG recommended that HUD develop\n and implement internal controls to ensure\n that the contract files are complete and in\n accordance with applicable regulations,\n policies, and procedures for contracts\n awarded in response to disaster-related\n events. (Audit Report: 2006-AT-0001)\n\n Ongoin\n Ong g Audits\n oing\n CDBG Disaster Funding\n\n Auditors are reviewing the system of\n controls over the homeowners program that\n is funding through the issuance of block\n grant funds for the States of Mississippi and\n Louisiana.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\n104 Hurricane Relief Oversight\n\x0cInvesti\nInv gations\n estig their contractors, conferring with HUD\n program officials and industry groups, and\n The HUD OIG Office of Investigation hosting and participating in law\nestablished the Disaster Relief Oversight enforcement meetings and conferences in\nDivision (DROD) to assist with oversight the Gulf Coast Region.\nresponsibilities in the detection and\nprevention of waste, fraud, and abuse of During this reporting period, OIG\nHUD CDBG disaster recovery assistance opened 66 investigative cases in the Disaster\nfunding available to five affected Gulf Coast Relief program areas. Judicial action taken\nStates. OIG also created the Hurricane on these cases during the period included\nRecovery Task Force, located in New $4380 in investigative recoveries, 13\nOrleans, LA, combining forces with the U.S. indictments/informations, 5 convictions/\nDepartment of Justice (DOJ), Federal Bureau pleas/pretrial diversions, 3 administrative\nof Investigation (FBI), Department of actions, and 13 arrests.\nHomeland Security (DHS) OIG, Social\nSecurity Administration (SSA) OIG, U.S. Some investigations discussed in this\nPostal Inspection Service (USPIS), and other report were conducted jointly with Federal,\nfederal agencies to jointly address state, and local law enforcement agencies.\nallegations of fraud and public corruption The results of various significant\nthrough active participation in the investigations are described below.\nHurricane Katrina Fraud Task Forces\n(HKFTF) located in Baton Rouge, LA; Hur ricane-Related Benefit\n Hurricane-Related\nJackson, MS; and Houston, TX.\n Fraud\n DROD is primarily responsible for\n Carolyn Richard and her husband\nliaison; research, analysis, and\n George Davis III, Lancaster City Housing\nrecommendations; monitoring, reporting,\n Authority (LCHA) Section 8 applicants,\nand dissemination; and strategic planning\n were sentenced in U.S. District Court,\nand implementation of HUD OIG OI\n Harrisburg, PA, for their earlier guilty pleas\ndirectives and initiatives associated with\n to providing LCHA false information.\ndisaster assistance and recovery. DROD\n Richard was sentenced to 6 months home\ndeveloped and participates in a far-reaching\n confinement and 2 years supervised\nfraud prevention program in the affected\n probation and fined $250; Davis III was\nstates of the Gulf Coast region. DROD\n sentenced to 2 years supervised probation\nsponsored disaster recovery funding\n and fined $450. Richard and Davis III,\nworkshops for prosecutors and law\n Hurricane Katrina evacuees from New\nenforcement, as well as state agencies\xe2\x80\x99\n Orleans, LA, who relocated to Columbia, PA,\npersonnel in the States of Louisiana and\n submitted an application for emergency\nMississippi. These disaster recovery\n housing through LCHA but failed to report\nfunding training workshops were designed\n their criminal histories, including Richard\xe2\x80\x99s\nto educate their state agencies, as well as\n release from a New Orleans jail as a result\nfederal, state, and local law enforcement, in\n of hurricane flood waters.\nidentifying fraud in the HUD Community\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nPlanning and Development (CPD) grant\nprograms. During this reporting period, OI\n Sheila Davis pled guilty in U.S. District\nsenior investigative management, DROD,\n Court, Harrisburg, PA, to making false\nand the Hurricane Recovery Task Force in\n statements to HUD. Davis submitted a false\nNew Orleans devoted significant efforts to\n application for emergency housing\nprevention and deterrence activities. This\n assistance to the Housing Authority of the\nincluded liaison with state agencies and\n\n\nHurricane Relief Oversight 105\n\x0c County of Dauphin when she claimed to be not entitled to receive and agreed to pay\n a Hurricane Katrina evacuee forced to restitution as a condition of her pretrial\n relocate to Harrisburg, PA, but actually diversion.\n resided in Harrisburg, PA, and was facing \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n eviction from her Harrisburg, PA apartment\n at the time.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Rashieda Hollins, a Houston Housing\n Authority Section 8 recipient, was indicted\n in U.S. District Court, Houston, TX, on three\n Tequila Marleen Davis, a Housing\n counts of making false claims. Hollins\n Authority of the County of Los Angeles\n allegedly filed three false FEMA applications\n (HACoLA) Section 8 recipient, and Ruby\n claiming she was a Hurricane Katrina\n Mae Jones, a Housing Authority of the City\n evacuee from New Orleans, LA, and\n of Los Angeles (HACLA) Section 8 recipient,\n received $4,550 in FEMA assistance to which\n were each charged in Los Angeles County\n she was not entitled to receive. Hollins was\n Superior Court, Los Angeles, CA, with\n terminated from HUD\xe2\x80\x99s Rental Assistance\n grand theft and cheating and defrauding\n Program for abandoning her subsidized\n FEMA. Davis and Jones, while receiving\n unit.\n housing assistance from HACoLA and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n HACLA, allegedly claimed to be victims of\n Hurricane Katrina and filed fraudulent\n Quanetha Joseph, an Indianapolis\n claims with FEMA, and each received $2,000\n Housing Authority (IHA) Section 8 tenant,\n U.S. Treasury checks based on their claims.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and her mother Penny Joseph were charged\n in Marion County Superior Court,\n Indianapolis, IN, with multiple counts of\n Tina Marie Gilmore, a Saint Clair\n welfare fraud and theft. Quanetha Joseph\n Housing Authority, Belleville, IL, Section 8\n allegedly claimed she lived in a New\n applicant, was indicted in U.S. District\n Orleans, LA, public housing unit during\n Court, East St. Louis, IL, on making false\n Hurricane Katrina when she applied for IHA\n statements to HUD, FEMA, and SSA.\n housing assistance. After receiving an IHA\n Gilmore allegedly filed false HUD, FEMA,\n public housing unit, Quanetha Joseph\n and SSA applications stating she lost her\n allegedly relocated to Houston, TX, failed to\n home and two children during Hurricane\n notify IHA of her relocation, and allowed her\n Katrina flooding in New Orleans, LA, but\n mother Penny Joseph to reside in her IHA\n Gilmore never had children and resided\n public housing unit. Penny Joseph allegedly\n with her spouse in Belleville, IL during the\n claimed she also was a victim of Hurricane\n hurricane.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Katrina but actually had lived in the\n Indianapolis area since January 2005.\n Quanetha Joseph filed for and obtained\n Della Lee, also known as Darby Orange,\n FEMA funding, Red Cross Assistance, and\n a Gainesville Housing Authority Section 8\n approximately $5,800 in IHA housing\n tenant, was indicted in U.S. District Court,\n assistance she was not entitled to receive;\n Plano, TX, on false statements and agreed\n Penny Joseph filed multiple false damage\n to a pretrial diversion. Lee allegedly\n claims, but all claims were denied. Quanetha\n misrepresented herself as a Hurricane\n and Penny Joseph were terminated from\n Katrina victim and displaced Mississippi\n HUD\xe2\x80\x99s Rental Assistance Program.\n resident but lived in Gainesville, TX, when\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Hurricane Katrina struck and was\n incorrectly listed by FEMA as a person\n Bridgette N. Toney, a Section 8 tenant at\n eligible for KDHAP. As a result, Lee\n Scotland Square Apartments, a HUD-funded\n received $4,380 in KDHAP benefits she was\n multifamily housing complex, was indicted in\n\n\n106 Hurricane Relief Oversight\n\x0cU.S. District Court, Baton Rouge, LA, on one rehabilitate and repair REO properties\ncount of making false claims and two counts for use by disaster victims.\nof making false statements. Toney allegedly\nfiled a claim with FEMA requesting $2,000 Hooks Van Holm\nin FEMA funds as a result of Hurricane\nKatrina damages to her personal property This M&M contractor\xe2\x80\x99s contract with\nand evacuation from her HUD-subsidized HUD was increased more than $15\nhousing unit, but Scotland Square million to provide repairs to single-\nApartments suffered no structural damage, family properties set aside for\nand residents were not forced to evacuate Hurricane Katrina victims. A review\nduring either Hurricanes Katrina or Rita. was performed to determine whether\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b the contractor properly accounted for\n and made the necessary repairs as\n Amanda Rettig, a Section 8 tenant of specified. Interviews, reviews of\nLyman Manor Apartments, a HUD- documentation, and property\nsubsidized multifamily housing complex, was inspections showed that the repair\nindicted in U.S. District Court, Gulfport, MS, work was adequate and the contractor\non numerous counts of making a false claim, maintained proper documentation for\nfalse statements, theft of public money, and the repairs.\nmail fraud. Rettig allegedly filed a FEMA\napplication claiming damages to her primary Public housing authorities \xe2\x80\x93 Ensure\nresidence and personal property in Saucier, adequate procedures and controls are\nMS, received $22,253 in FEMA assistance, but in place to safeguard CDBG disaster\nresided in a HUD-subsidized housing unit in recovery funding used to repair and\nGulfport, MS, during Hurricane Katrina. replace public housing units in New\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Orleans and elsewhere and to verify\n that costs and expenses are proper and\n Roosevelt Ingram, a LaFouche Parish documented.\nHousing Authority Section 8 tenant, pled\nguilty in St. Charles Parish District Court, Des HANO\nAllemands, LA, to battery and criminal\ndamage to property. Ingram was sentenced This is an ongoing review of the\nto 6 months confinement (suspended) and 2 Authority\xe2\x80\x99s contract to include\nyears active probation. Ingram, a fugitive all contracts awarded post-Hurricane\nfelon with an outstanding warrant was Katrina. Also reviewing the\narrested and removed from a barricaded Authority\xe2\x80\x99s homeownership program.\ntemporary housing trailer during HUD OIG\nOperation Falcon II, and terminated from Multifamily properties \xe2\x80\x93 Review HUD\nHUD\xe2\x80\x99s Rental Assistance Program. recertification and housing assistance\n payments procedures for selected\nHur ricane-Related\nHurricane-Related multifamily properties located in the\n Gulf Coast states.\nInspections\n HUD OIG is using forensic auditors Sunlight Manor Apartments\nlocated in the Gulf Coast region to review\nand evaluate the following: This is an ongoing review of the\n property\xe2\x80\x99s contracting to repair\n damage sustained by Hurricane Rita\n M&M firms, which received\n and the property\xe2\x80\x99s housing assistance\n advance payments from HUD to\n\n\nHurricane Relief Oversight 107\n\x0c payment procedures to ensure that\n payments were accounted for properly.\n Hur ricane-Related\n Hurricane-Related\n Outr eac\n Outreac h\n each\n MDA \xe2\x80\x93 Determine whether MDA and/\n or its contractor(s) used \xe2\x80\x9csuspicious Louisiana Outr eac\n Outreac h\n each\n activity reports\xe2\x80\x9d or similar reports\n designed to detect fraud during HUD Inspector General Kenneth M.\n the homeowner assistance grant Donohue chaired an hour-long panel\n application process. discussion on administrative and civil fraud\n enforcement remedies in New Orleans, LA.\n This is an ongoing review of the United States Attorney General Alberto\n homeowner application process from Gonzales and the Department of Justice\n reports supplied by MDA\xe2\x80\x99s contractor. hosted this event to commemorate the\n These reports identify homeowners one-year anniversary of Hurricane Katrina.\n that potentially made multiple \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n applications on the same property.\n These reports also identify Louisiana Attorney General Charles Foti\n homeowners that potentially hosted a press conference for the \xe2\x80\x9cLouisiana\n submitted multiple applications on Road Home Zero Tolerance Program\xe2\x80\x9d in\n more than one property. Baton Rouge, LA. Speakers at the press\n conference included Roy A. Bernardi,\n HKFTF \xe2\x80\x93 Louisiana State University Deputy Secretary of HUD, Kenneth M.\n (LSU) Donohue, HUD Inspector General, David\n Dugas, Donald Washington and James\n This is an ongoing review of complaints Letten, U.S. Attorneys representing three\n received by the HKFTF to determine\n whether they warrant investigation or\n review by HUD OIG, including an\n analysis of HUD Section 8 tenants\n using the National Emergency\n Management Information System\n (NEMIS) to determine which tenants\n received funding through FEMA.\n\n Hur ricane-Related OIG\n Hurricane-Related\n Hotline\n During this reporting period, the Speakers at the \xe2\x80\x9cLouisiana \xe2\x80\x98Road Home\xe2\x80\x99 Zero\n Hotline received and processed 45 Tolerance Program\xe2\x80\x9d from left to right: Robbie Tighe,\n complaints related to Hurricanes Katrina, Compliance Officer, Road Home Program, ICF\n Rita, and Wilma. International; Mike Byrne, Chief Program Officer,\n Road Home Program ICF International; Roy\n Bernardi, HUD Deputy Secretary; Charles Foti,\n Attorney General, State of Louisiana; David Dugas,\n United States Attorney, Middle District of Louisiana;\n Donald Washington, United States Attorney,\n Western District of Louisiana; Jim Letten, United\n States Attorney, Eastern District of Louisiana;\n Kenneth M. Donohue, HUD Inspector General; and\n Sharon B. Robinson, Inspector General, State of\n Louisiana.\n\n\n108 Hurricane Relief Oversight\n\x0cLouisiana judicial districts, and Mike Byrne, personnel on the nuances of HUD\xe2\x80\x99s annual\nCEO of ICF International, the \xe2\x80\x9cThe Road CDBG and Disaster Supplemental CDBG\nHome\xe2\x80\x9d program contractor. The press funding. Hosted by Louisiana Attorney\nconference described a \xe2\x80\x9cZero Tolerance\xe2\x80\x9d General Charles Foti and the Louisiana\npolicy relating to the detection, prevention, Recovery Authority (LRA), guest speakers\nand Federal or state prosecution of all included Mr. Leroy Frazer, Bureau Chief of\nfraudulent activity as Louisiana begins the the Special Prosecutions Bureau, Manhattan\ndistribution of nearly $6 billion to District Attorney\xe2\x80\x99s Office; SAC Ruth\nhomeowners affected by Hurricanes Katrina Ritzema, HUD OIG New York field office;\nand Rita. SA Jenell Clark, Small Business\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Administration (SBA) OIG; David Dugas,\n U.S. Attorney, Middle District of Louisiana;\n Deputy Assistant Inspector General for Richard McClintock, Director, KPMG LLP,\nInspections and Evaluations (DAIGI) John and Mike Byrne, CEO, ICF International.\nMcCarty, Acting Special Agent in Charge HUD OIG Management Analyst Desiree\n(SAC) Thomas Luke, and Special Agent Johnson facilitated the training workshop\n(SA) Robert Anderson, provided a tour of attended by approximately 50 Federal, state,\nthe devastation caused by Hurricane and local law enforcement personnel.\nKatrina in New Orleans, LA, and\nMississippi to Gale Burton, Maggie Owens,\nand Bruce Friedland, three staff members\nof the U.S. House of Representatives\nAppropriations Committee, Sub-Committee\non Surveys and Investigations. The\nLouisiana tour included Orleans Parish, St.\nBernard Parish, and St. Tammany Parish,\nand focused on public housing and\nmultifamily locations. A tour of New\nOrleans included three public housing\nprojects set for demolition as a result of\nHurricane Katrina, two HOPE VI\ndevelopments destroyed by Hurricane SAC Larry Amaker presenting information at the\nKatrina, and one completely reoccupied and HUD Disaster Recovery Funding workshop in Baton\n Rouge, LA in September 2006.\ntwo partially reoccupied housing\ndevelopments. The Mississippi tour\nincluded Gulfport and Biloxi areas, and\nconcentrated on neighborhoods that held a\nhigh percentage of Federal Housing\nAdministration (FHA)-insured single-\nfamily residences, multifamily properties,\nand public housing units destroyed by\nHurricane Katrina.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n SAC Larry Amaker presented training\non Disaster Recovery Funding to\nprosecutors and law enforcement personnel\n SAC Ruth Ritzema briefing on \xe2\x80\x9cLesson Learned New\nat the State House in Baton Rouge, LA. The York Disaster Recovery\xe2\x80\x9d at the HUD Disaster\nDisaster Recovery Funding workshop was Recovery Funding workshop held in Baton Rouge,\ndesigned to educate law enforcement LA.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\nHurricane Relief Oversight 109\n\x0c Acting SAC Thomas Luke, Senior Acting SAC Thomas Luke provided a\n Forensic Auditor (SFA) Windell Durant, and briefing on the current condition of the\n Assistant Regional Inspector General Housing Authority of New Orleans\n for Audit (ARIGA) Rose Capalungan (HANO), HANO refurbishment/ rebuilding\n participated in an initial meeting of the contracts, the present stage of housing\n Louisiana Road Home Fraud Prevention and developments off-line, the status of out-of-\n Investigations Task Force hosted by the State state evacuees, and an overview of assistance\n of Louisiana Attorney General in Baton available through the Hurricane Katrina\n Rouge, LA. Other task force members Fraud Task Force (HKFTF) located in Baton\n include the Louisiana Attorney General\xe2\x80\x99s Rouge, LA, to members of the Project Safe\n Office, ICF International and KPMG, two Neighborhood (PSN) Executive Council in\n contractors hired by the State of Louisiana New Orleans, LA. The PSN Executive\n to administer the Road Home Program, Counsel consists of personnel from the U.S.\n Louisiana State Office of Legislative Audit, Attorney Office for the Eastern District of\n and three United States Attorneys\xe2\x80\x99 Offices Louisiana; Assistant U.S. Attorneys\n in Louisiana. HUD OIG presented the prosecuting violent, gun, drug, and fraud\n current and future efforts in the State of crimes; Federal agents from FBI, Drug\n Mississippi, and discussed numerous issues Enforcement Agency (DEA), U.S. Marshals\n surfacing in administering the Mississippi Service (USMS) and Alcohol, Tobacco,\n Development Authority (MDA) plan of Firearms, and Explosives (ATFE); staff from\n action. A lengthy review of future fraud New Orleans District Attorney Office; and\n prevention measures in Louisiana law enforcement personnel from New\n undertaken by HUD OIG and the United Orleans and Jefferson, Orleans and St.\n States Attorneys\xe2\x80\x99 Offices followed. Bernard Parishes. HUD OIG agreed to\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b coordinate efforts between PSN members\n and HANO.\n Acting SAC Thomas Luke, SFA Windell \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Durant, and HUD OIG Hotline Director\n Robert Ashworth attended a Louisiana State Acting SAC Thomas Luke provided a\n Attorney General\xe2\x80\x99s Hurricane Katrina Fraud briefing on the Louisiana Recovery\n Task Force (HKFTF) working group meeting Authority (LRA), the Mississippi\n in Baton Rouge, LA. The HKFTF working Development Authority (MDA), and the\n group met to discuss methods necessary to relationship between these state agencies\n insure valid fraud complaints or and HUD OIG Office of Investigations to\n mismanagement of CDBG funds are entered staff members from the House\n into a Department of Justice database. Appropriations Committee, Surveys and\n Hotline Director Ashworth provided Investigations office in New Orleans, LA.\n suggestions and guidance to two contractors In addition, Acting SAC Luke provided an\n administering Hurricane Katrina CDBG overview of the relationship between HUD\n funds, ICF International and KPMG, when OIG and the Hurricane Katrina Fraud Task\n establishing the Louisiana \xe2\x80\x9cRoad Home\xe2\x80\x9d Force, how LRA and MDA interact on issues\n hotline. In addition, discussions were held of suspected fraud, and current efforts for\n relating to \xe2\x80\x9cRoad Home\xe2\x80\x9d hotline public proactive fraud prevention. Deputy\n service announcements. Officials from Assistant Inspector General for Audit\n Department of Justice, Louisiana State (DAIGA) Robert Gwin and members of the\n Attorney General\xe2\x80\x99s Office, Louisiana Office New Orleans Audit staff provided an\n of Economic Development, ICF overview of audit functions involving both\n International, KPMG LLP, and Governor LRA and MDA. At the completion of the\n Blanco\xe2\x80\x99s office attended. briefings, SA Robert Anderson provided the\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b House staff members with a tour of New\n\n\n110 Hurricane Relief Oversight\n\x0cOrleans\xe2\x80\x99 low-income and public housing\nneighborhoods.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n SA Robert Anderson provided a fraud\nawareness briefing at the Louisiana Housing\nCouncil conference held in Baton Rouge,\nLA. SA Anderson provided information on\nHUD OIG roles and responsibilities to\napproximately 75 Louisiana Public Housing\nAuthorities executives in attendance.\n\nMississippi Outr eac\n Outreac h\n each State Auditor Phil Bryant addressing law enforcement\n personnel attending the HUD OIG sponsored Disaster\n Recovery Funding Workshop in Hattiesburg, MS in\n DAIGI John McCarty, Acting SAC July 2006.\nThomas Luke, ARIGA Rose Capalungan,\nand SFA Windell Durant conducted a\nbriefing and overview of the Mississippi District of Mississippi; John Dowdy,\nDevelopment Authority (MDA) action plan Assistant U.S. Attorney, Southern District of\nto Dunn Lampton, U.S. Attorney, Southern Mississippi; numerous District Attorneys\nDistrict of Mississippi, members of the FBI, and their representatives, as well as audit\nauditors from Mississippi State Auditor personnel from the Mississippi Office of the\nOffice, and District Attorneys representing State Auditor. Representing HUD OIG was\nfour affected counties in Southern ARIGA Rose Capalungan, SSA Sandra\nMississippi at a meeting held in Jackson, Hackworth, and SAs Robert Anderson,\nMS. The briefing provided a synopsis of William Bathke, and Michael Gibson.\nfunding, an explanation on how MDA will Approximately 50 law enforcement agents\nwithdraw funds, and covered topics and personnel attended the workshop. The\nincluding Federal and state prosecutions, Disaster Recovery Funding Workshop was\nconstruction working groups, Memoranda designed to train law enforcement personnel\nof Understanding (MOU) between Federal on the nuances found in the HUD Annual\nand state agencies, and additional training CDBG funding and Disaster Supplemental\nfor prosecutors and local law enforcement. CDBG funding.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n SAC Larry Amaker and Acting SAC Acting SAC Thomas Luke and\nThomas Luke sponsored a Disaster Supervisory Forensic Auditor (SFA) Windell\nRecovery Funding Workshop on the campus Durant provided multiple fraud awareness\nof the University of Southern Mississippi briefings to employees of the Reznick Group\nlocated in Hattiesburg, MS. Mississippi and Allied American Adjusting in Gulfport,\nState Auditor Phil Bryant made a guest Gautier, and Bay St. Louis, MS. The\nappearance to kick off the start of the HUD Mississippi Development Authority\nOIG workshop, and other guest speakers contracted with the Reznick Group to\nincluded SAC Ruth Ritzema, SAC Peter administer their homeowner assistance\nEmerzian, and SA Jenell Clark, Small grant program, and Allied American\nBusiness Administration (SBA) OIG. Those Adjusting to conduct appraisals of single-\nin attendance included David Dugas, U.S. family homes damaged or destroyed during\nAttorney, Middle District of Louisiana; Hurricane Katrina.\nDunn Lampton, U.S. Attorney, Southern \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nHurricane Relief Oversight 111\n\x0c Acting SAC Thomas Luke provided Attorney Dunn Lampton and Assistant U.S.\n remarks at a press conference held at the Attorney John Dowdy, Chief of the Criminal\n Mississippi Gulf Coast Convention Center Division, provided an update on current\n in Biloxi, MS. Hosted by Phil Bryant, State investigations. Mississippi Attorney\n Auditor for Mississippi, the press General Jim Hood and local District\n conference was called to announce the Attorneys provided an overview of issues\n formation of the Katrina Fraud Prevention they faced, and described current contractor\n and Detection Unit. Speeches given by fraud investigations and consumer\n Mississippi Governor Haley Barbour and protection violations. Representatives from\n Dunn Lampton, U. S. Attorney, Southern FBI, Department of Homeland Security\n District of Mississippi, highlighted the Office of Inspector General, Mississippi State\n conference. Others in attendance included Auditors Office, Mississippi Bureau of\n Congressman Gene Taylor\xe2\x80\x99s representative, Investigations, and numerous southern\n U.S. Marshal Nehemiah Flowers, Federal Mississippi District Attorney offices and law\n Bureau of Investigation (FBI) SAC John enforcement personnel attended.\n Rucci, HUD OIG Assistant Regional \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Inspector General for Audit (ARIGA) Rose\n Capalungan, and District Attorneys and Acting SAC Thomas Luke and SA\xe2\x80\x99s\n Sheriffs from four Mississippi counties Michael Gibson and Toni Zavala\n affected by the hurricanes. participated in a \xe2\x80\x9cContractor Fraud Working\n Group\xe2\x80\x9d (CFWG) hosted by Southern District\n of Mississippi U.S. Attorney Dunn Lampton\n and Assistant U.S. Attorney John Dowdy,\n Chief of the Criminal Division in Gulfport,\n MS. U.S. Attorney Lampton, in conjunction\n with the State of Mississippi Attorney\n General\xe2\x80\x99s Office, formed the CFWG and\n includes representatives from the FBI,\n District Attorneys\xe2\x80\x99 Offices, Sheriff\xe2\x80\x99s Offices,\n and Police Departments from seven localities\n along the gulf coast affected by Hurricane\n Katrina, MS State Auditors Office, and MS\n State Police. The CFWG met to develop a\n Acting SAC Thomas Luke (right) conversing with standard operating procedure for recording,\n United States Attorney, Dunn Lampton (left) and investigating, and prosecuting homeowner\n State Auditor Phil Bryant (center) in Hattiesburg, complaints involving contractors. U.S.\n MS at the HUD OIG sponsored Disaster Recovery Attorney Lampton provided an overview of\n Funding Workshop. the procedures for prosecuting complaints,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n a briefing on the Hurricane Katrina Fraud\n Task Force (HKFTF) process of recording\n Acting SAC Thomas Luke, SFA Windell complaints, and described assistance\n Durant, and HUD OIG Hotline Director available to local law enforcement from\n Robert Ashworth attended a Mississippi HKFTF task force members.\n fraud working group meeting held at the \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n U.S. Attorney\xe2\x80\x99s Office in Gulfport, MS.\n Deputy Attorney General Alice Fischer Acting SAC Luke accompanied\n provided an overview of Department of Congressional staff members from the\n Justice efforts to assist local District House Appropriations Committee to the\n Attorneys and law enforcement personnel, MDA Service Center in Gulfport, MS. At\n and Southern District of Mississippi U.S. the MDA Center, representatives from the\n\n\n112 Hurricane Relief Oversight\n\x0cReznick Group provided a briefing on the TDHCA, TXORC, and four Councils of\nMississippi Housing Assistance Program, a Governments overseeing Hurricane Rita\nwalkthrough of the intake procedure, and recovery efforts in their communities.\nan observation of an actual applicant \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nprogressing through the CDBG grant\napplication process. After the MDA Service SAC Larry Amaker and Assistant\nCenter visit, staff members were provided Director for Technical Planning & Oversight\nwith a tour of single-family neighborhoods Christine Begola met with Florida\nin both Gulfport and Biloxi before a fraud Department of Community Affairs (FDCA)\nreferral briefing by Mississippi State officials in Tallahassee, FL. SAC Amaker\nAuditors in Hattiesburg. provided the role and responsibilities of\n HUD OIG in overseeing HUD CDBG\nOther Outr eac\n Outreac h\n each funding to the State of Florida. Anne Kittrell,\n Inspector General for the State of Florida,\n HUD OIG Deputy Inspector General FDCA Chief of Staff Janice Browning, FDCA\n(DIG) Michael Stephens,DAIGI John Ted Court, and HUD OIG Region 4 SAC\nMcCarty, SAC Larry Amaker, Senior Special William Creel and ASAC Timothy Mowery\nAgent (SSA) Hackworth, and HUD OIG also attended.\nAuditors Christine Begola and Patrick \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\nBannon attended the President\xe2\x80\x99s Council on\nIntegrity and Efficiency/Executive Council SSA Sandra Hackworth and SA Michael\non Integrity and Efficiency (PCIE/ECIE) Gibson provided a presentation at the\nHomeland Security roundtable meeting for Alabama Department of Economic and\nOIG Hurricane Katrina Oversight in Community Affairs (ADECA) training\nWashington, D.C. Topics of discussion workshop held at the Mitchell Center on\nincluded legislative updates, government the University of Alabama campus in\nreform initiatives, Gulf Coast small business Mobile, AL. ADECA is the state agency\ncontracting issues, GAO updates on Gulf administering funding provided to Alabama\nCoast initiatives, and updates on the for its recovery from the effects of Hurricane\noperations of the Hurricane Katrina Fraud Katrina. SSA Hackworth and SA Gibson\xe2\x80\x99s\nTask Force. presentation, an integral part of ADECA\xe2\x80\x99S\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b workshop, focused on HUD\xe2\x80\x99S Community\n Development Block Grant (CDBG) disaster\n DAIGI John McCarty, ARIGA Rose recovery funding program and contract\nCapalungan, and Region 6 ASAC Michael fraud awareness. SSA Hackworth and SA\nWilson met with representatives of HUD Gibson also hosted a question and answer\nand Texas Department of Housing and session following their presentation.\nCommunity Affairs (TDHCA) in Austin, Approximately 50 ADECA grantees and\nTexas. DAIGI McCarty presented the role sub-grantees attended.\nand responsibilities of HUD OIG in the \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\nhurricane recovery process, and offered\nHUD OIG assistance in program\ndevelopment. Officials in attendance\nincluded Katie Worsham, Director of HUD\nOffice of Community Planning and\nDevelopment (CPD), Fort Worth, Texas,\nJennifer Molinari, TDHCA, Oralia Cardenas,\nTexas\xe2\x80\x99 Office of Rural Community Affairs\n(TXORC), and representatives and staff of\n\n\n\nHurricane Relief Oversight 113\n\x0c Pictures of HUD OIG\xe2\x80\x99\n Pictures OIG\xe2\x80\x99ss Hurricane Relief and\n Hurricane\n Reco\n Recovver\n eryy Effor\n Efforts\n orts\n\n\n\n\n Frenchman\xe2\x80\x99s Wharf, HUD multifamily location,\n New Orleans East.\n\n\n\n\n HOPE VI project, Abundance Square, 9th Ward,\n New Orleans, LA.\n\n\n\n\n DAIGI John McCarty and SA Robert Anderson\n briefing congressional staffer Bruce Friedland at\n Frenchman\xe2\x80\x99s Wharf located in New Orleans East.\n\n\n\n\n Lake Pontchartrain as seen from Carr Drive in\n Slidell, LA.\n\n\n\n\n Acting SAC Thomas Luke leading congressional\n staffers on a tour of Abundance Square located in the\n 9th Ward, New Orleans, LA.\n\n\n\n114 Hurricane Relief Oversight\n\x0c DAIGI John McCarty and Acting SAC Thomas\nFlood-damaged home in Lakeview neighborhood, Luke conferring with congressional staffers at the\nNew Orleans, LA. Industrial Canal breach, Lower 9th Ward, New\n Orleans, LA.\n\n\n\n\n Hurricane-damaged structure along the Mississippi\n Gulf Coast.\n\nHurricane-damaged structure along the Mississippi\nGulf Coast.\n\n\n\n\n Hurricane Relief Oversight 115\n\x0c\x0c Chapter 7\n Other Significant HUD Audits\n Significant\nand Investi\n Inv gations/OIG Hotline\n estig\n\x0c Audit incorporated into HUD\xe2\x80\x99s contingency and\n disaster recovery plans and that the\n documents reflect current conditions and\n During this reporting period, the Office incorporate corrective actions identified, (2)\n of Inspector General (OIG) issued one ensure that the Lockheed Martin Network\n external and three internal reports Operating Center develops a memorandum\n involving areas of U.S. Department of of understanding with its alternate recovery\n Housing and Urban Development (HUD) sites to ensure that the facilities have the\n operations that do not fall under major HUD capability to restore HUD applications\n programs reported in previous chapters. within the required timeframes, and (3)\n These reports disclosed more than $930,000 evaluate the Electronic Data Systems and\n in questioned costs and over $470,000 in SunGard \xe2\x80\x9cno priority of service\xe2\x80\x9d provisions\n funds put to better use. to determine whether conflicting priorities\n impact the recovery time objectives. (Audit\n OIG\xe2\x80\x99s more significant audits are Report: 2006-DP-0005)\n discussed below.\n\n HUD Inf or\n Information\n ormation HUD Inf or\n Information\n ormation\n Technolo gy Contin\n hnology\n Technolo Continggenc\n encyy Tec hnolo gy Compliance\n hnology\n Technolo\n Plannin\n Planningg and Prepar\n Prepar edness\n eparedness with OMB M-06-16\n Compliance with Federal \xe2\x80\x9cPr otection of Sensiti\n \xe2\x80\x9cProtection Sensitivve\n Requir ements\n Requirements Agenc\n encyy Inf\n Agenc or\n Infor mation\xe2\x80\x9d\n ormation\xe2\x80\x9d\n HUD OIG completed a limited scope\n HUD OIG audited HUD\xe2\x80\x99s information assessment of HUD\xe2\x80\x99s compliance with\n technology contingency planning and Office of Management and Budget (OMB)\n preparedness compliance with federal Memorandum M-06-16, \xe2\x80\x9cProtection of\n requirements and its ability to recover in the Sensitive Agency Information.\xe2\x80\x9d The\n event of interruption or disaster in a timely memorandum stresses that federal agencies\n manner. take all necessary and reasonable measures\n to eliminate significant vulnerabilities to the\n The following areas of concern were sensitive information entrusted to them.\n identified: (1) the information contingency Agencies are required to (1) implement\n planning process does not fully use the National Institute of Standards and\n planning process as recommended by the Technology-recommended security controls\n National Institute of Standards and and take specific actions by August 7, 2006,\n Technology, (2) there is no assurance that the and (2) answer questions related to\n alternate data recovery facilities have the personally identifiable information and the\n capability to restore HUD\xe2\x80\x99s mission-critical extent to which specific controls and actions\n and major applications within the required required by the memorandum were\n timeframes, and (3) HUD\xe2\x80\x99s information designed and implemented. Additionally,\n technology contingency and disaster the Inspectors General community is\n recovery plans are not documented and required to assess compliance with the\n maintained to reflect current conditions. memorandum. OIG has determined that the\n contents of this memorandum would not be\n OIG recommended that HUD (1) appropriate for public disclosure. Therefore,\n request that program officials complete the it has limited its distribution to selected\n business impact analysis and risk HUD officials. (Audit Report: 2006-DP-\n assessments and ensure that they are 0802)\n\n118 Other Significant HUD Audits and Investigations/OIG Hotline\n\x0cFederal Infor\n Infor mation\n ormation million grant; and not award the Council\n additional funding until it has implemented\nSecurity Mana\n Manag gement Act adequate financial management and\nof 2002 procurement systems and can provide\n evidence that it has developed the\n organizational capacity to carry out a HUD\n The Federal Information Security grant. (Audit Report: 2006-LA-1013)\nManagement Act of 2002 (FISMA) directs \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nHUD OIG to perform an annual\nindependent evaluation of HUD\xe2\x80\x99s\ninformation security program and practices.\nOIG has determined that the contents of this\nmemorandum would not be appropriate for\npublic disclosure and has, therefore,\nlimited its distribution to selected\nofficials. (Audit Report: 2006-DP-0803)\n\nHealth\nHealthyy Homes Initiati\n Initiativve\nGrant\n HUD OIG audited the Child Abuse\nPrevention Council of Sacramento, located\nin North Highlands, CA, in response to a\nreferral from HUD. The objectives were to\ndetermine whether the Council\nadministered its Supportive Housing\nProgram grant in accordance with HUD\nrequirements and its grant agreement.\n\n The Council did not adequately\nadminister its Healthy Homes Initiative\ngrant. As a result, nearly $937,000 of the\nmore than $1 million in payment\n(reimbursement) requests submitted to\nHUD was for ineligible and unsupported\ncosts.\n\n OIG recommended that HUD require\nthe Council to repay it from nonfederal\nsources for ineligible and unsupported\nexpenses (for which reimbursement was\npreviously received from HUD); not pay the\nCouncil for outstanding reimbursement\nrequests, consisting of ineligible and\nunsupported expenses, unless it can provide\nadequate supporting documentation;\ndeobligate all remaining grant funds\nincluding ineligible costs, any unsupported\ncosts that cannot be documented, and the\nalmost $473,000 unused portion of the $1.5\n\nOther Significant HUD Audits and Investigations/OIG Hotline 119\n\x0c Investi\n Inv gation\n estig OIG Hotline\n During this reporting period, OIG The HUD OIG Hotline is operational 5\n opened 14 investigation cases and closed 10 days a week, Monday through Friday, from\n cases involving areas of HUD operations 10:00 a.m. to 4:30 p.m. The Hotline is staffed\n that do not fall under specific programs by seven full-time OIG employees, who take\n identified in other chapters of this report. allegations of waste, fraud, abuse, or serious\n Judicial actions taken on these cases during mismanagement in HUD or HUD-funded\n the period included 2 indictments/ programs from HUD employees,\n informations, 1 convictions/pleas/pretrial contractors, and the public and coordinate\n diversions, 3 personnel actions, and 1 arrest. reviews with internal audit and investigative\n units or with HUD program offices.\n\n During this reporting period, the\n Hotline received and processed 10,588\n complaints \xe2\x80\x93 76 percent received by\n telephone, 17 percent by mail, and 7 percent\n by e-mail. Every allegation received by the\n Hotline is logged into a database and\n tracked.\n\n Of the complaints received, 1,196 were\n related to the mission of OIG and were\n addressed as Hotline cases. Hotline cases\n are referred to OIG\xe2\x80\x99s Offices of Audit and\n Investigation or to HUD program offices for\n action and response. The following\n illustration shows the distribution of Hotline\n case referrals by percentage.\n\n The Hotline closed 832 cases this report-\n ing period. The closed Hotline cases in-\n cluded 130 substantiated allegations. The\n substantiated allegations resulted in six ad-\n ministrative sanctions against HUD employ-\n ees for personnel violations or investors for\n improprieties involved in the purchase of a\n home. The Department also took 124 cor-\n rective actions that resulted in $69,798 in\n recoveries of losses and $2,158,300 in HUD\n funding that could be put to better use. The\n recoveries included repayments of overpaid\n rental subsidies. Some of the funds that\n could be put to better use were the result of\n cases in which tenants were terminated from\n public housing or multifamily housing pro-\n grams for improperly reporting their in-\n comes or family composition to qualify for\n rental assistance.\n\n\n\n120 Other Significant HUD Audits and Investigations/OIG Hotline\n\x0c Char\n Chartt 7.2: Hotline Cases Opened bbyy Pr\n Proogram Ar ea\n Area\n\n\n Single-Family Multifamily\n Housing Housing\n 6% 13%\n Other HUD\n Offices\n 3%\n\n OIG Audit Public and\n and Investigation Indian\n 12% Housing\n 66%\n\n\n\n\n Char\n Chartt 7.3\n .3:: Hotline Dollar Impact fr\n 7.3 om Pr\n from Proogram Offices\n 2,000,000\n $1,809,611\n 1,800,000\n 1,600,000\n 1,400,000\n 1,200,000\n 1,000,000\n 800,000\n 600,000\n 400,000 $264,689\n 200,000 $84,000 $14,168 $55,630\n 0\n Single-Family Housing Multifamily Housing Public and Indian Housing\n\n Recoveries $69,798 Funds Put to Better Use $2,158,300\n\n\n\n\n Char\n Chartt 7.4\n .4:: Substantiated Cases bbyy T\n 7.4 ype of Complaint Recei\n Type ved bbyy Hotline\n Receiv\n\n\n Owner/Occupant\n Mismanagement\n Violations\n 7%\n 5%\n Other\n 3%\n\n\n\n\n Rental Fraud and\n Improprieties\n 85%\n\n\n\n\nOther Significant HUD Audits and Investigations/OIG Hotline 121\n\x0c\x0c Chapter 8\nOutr eac\nOutreac h Eff\n each or\n Effor ts\n orts\n\x0c To foster cooperative, informative, and IG Kenneth Donohue, Assistant Special\n mutually beneficial relationships with Agent in Charge (ASAC) Suzanne\n agencies and organizations whose intent is Steigerwald, and RIGA Ron Hosking met\n to assist the accomplishment of the U.S. with the U.S. Attorney for the District of\n Department of Housing and Urban Colorado and members of his staff in their\n Development\xe2\x80\x99s (HUD) mission, the Office of Denver, CO, office. They also met with staff\n Inspector General (OIG) participates in a of the Colorado Bureau of Investigations in\n number of special outreach efforts. These its Denver office. The topic of discussion at\n efforts, as described below, are in addition both meetings was fraud in HUD\xe2\x80\x99s single-\n to OIG\xe2\x80\x99s regular coordination with federal, family programs.\n state, and local law enforcement agencies; \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n other OIGs; and various congressional\n committees and subcommittees. During IG Kenneth Donohue, SAC Barry\n these outreach efforts, OIG presents the McLaughlin, and RIGA Heath Wolfe\n results of its audit and investigative work, participated in the Minnesota NAHRO\n discusses its goals and objectives, and conference, which was held in Breezy Point,\n provides information about its role and MN. IG Donohue was the keynote speaker,\n function. and he presented an overview of OIG, OIG\xe2\x80\x99s\n mission and role, and the general functions\n Inspector General (IG) Kenneth of the Offices of Investigation and Audit.\n Donohue; Regional Inspector General for There were more than 300 members in\n Audit (RIGA) Edgar Moore; Special Agent\n attendance. SAC McLaughlin and RIGA\n in Charge (SAC) Ruth Ritzema; and\n Wolfe participated in a round table\n Assistant Inspector General/Director of\n discussion in which they explained common\n Investigations (AIG/DOI) Steve Pasichow,\n audit findings, the \xe2\x80\x9cred flags\xe2\x80\x9d of fraud, and\n Port Authority of New York/New Jersey,\n were guest speakers at the Association of fraud case studies and discussed good\n Government Accountants\xe2\x80\x99 (AGA) 55th public housing authority operating\n Annual Professional Development practices.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Conference in San Diego, CA. The\n presentation was entitled \xe2\x80\x9cThe Tragedy and\n Aftermath of September 11, 2001; Oversight Deputy Inspector General (DIG)\n of Disaster Assistance Funding and Lessons Michael Stephens, SAC William Creel, and\n Learned.\xe2\x80\x9d IG Donohue was the moderator, ASAC Ruth Valdes participated in a HUD-\n while RIGA Moore and SAC Ritzema made sponsored Single-Family Mortgage Fraud\n presentations on HUD OIG\xe2\x80\x99s audits and Symposium in Savannah, GA. The\n investigative efforts regarding Community symposium, entitled \xe2\x80\x9cStop Mortgage Fraud:\n Development Block Grant (CDBG) Disaster A Call To Action,\xe2\x80\x9d was attended by more\n Recovery Assistance funds provided to the than 650 members of the real estate\n State of New York in response to the community representing Fannie Mae,\n September 11, 2001, terrorist attacks. AIG/ Freddie Mac, the North Carolina Real Estate\n DOI Pasichow provided a presentation on Commission, the Florida Office of Financial\n the Port Authority\xe2\x80\x99s efforts in using integrity Regulation, the Georgia Department of\n monitors to help in overseeing Port Banking and Finance, and mortgage and real\n Authority funding provided after the estate professionals. DIG Stephens served\n September 11 tragedy. as the moderator for a panel of seven\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b presenters addressing \xe2\x80\x9cEnforcement After\n the Crime.\xe2\x80\x9d Panel members included ASAC\n Valdes, HUD OIG Miami field office; SAC\n Brian Lamkin, Federal Bureau of\n\n\n\n124 Outreach Efforts\n\x0c Federal Housing Administration (FHA)\n mortgage environment, working with law\n enforcement, and forfeiture laws, and\n illustrated recent successful investigations.\n Approximately 60 MBA members attended.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n New England Regional SAC Peter\n Emerzian, ASAC Diane DeChellis, and\n ARIGA Michael Motulski presented HUD\n OIG\xe2\x80\x99s mission, priorities, and successful\n investigations/audits involving HUD\xe2\x80\x99s\nDeputy Inspector General Michael Stephens public and Indian housing program at the\npresenting at a HUD-sponsored Single-Family annual Connecticut National Association of\nMortgage Fraud Symposium in Savannah, GA. Housing and Redevelopment Officials\n (NAHRO) conference held at the Mohegan\nInvestigation (FBI), Columbia, SC, division; Sun in Uncasville, CT. More than 300\ntwo assistant U.S. attorneys (AUSA); officials representing approximately 25\nand Verlon Shannon, Director of HUD\xe2\x80\x99s Connecticut public housing authorities\nQuality Assurance Division, Atlanta attended.\nHomeownership Center. DIG Stephens\ndiscussed HUD OIG\xe2\x80\x99s commitment to\ninvestigating and prosecuting those who\nprey on the mortgage industry to illegally\nenrich themselves, and ASAC Valdes spoke\non the importance of combining law\nenforcement resources and industry\nprofessionals to hold offenders accountable.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n SAC Barry McLaughlin, along with\nrepresentatives from the U.S. Attorney\xe2\x80\x99s Office\n(USAO), U.S. Trustee\xe2\x80\x99s Office, and FBI,\nprovided a panel discussion and presentation Region 1 ASAC Diane Dechellis, CT NAHRO\n Executive Director Carol Barlow, & Region 1\nto more than 50 individuals attending a ARIGA Michael Motulski at the Connecticut\nmeeting of the Illinois Association of Mortgage NAHRO conference held at the Mohegan Sun in\nBrokers and Bankers in Chicago, IL. Panel Uncasville, CT.\nmembers presented their agencys\xe2\x80\x99 mission, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nand collectively the panel discussed law\nenforcement methods used for investigating Patrick Meehan, U. S. Attorney for the\nreal estate fraud. Eastern District of Pennsylvania, held a\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b press conference at Lucien Blackwell\n Homes, a Philadelphia Housing Authority\n SAC Barry McLaughlin, along with an (PHA) public housing development located\nFBI supervisory special agent (SA) and legal in southwest Philadelphia, PA, to announce\ncounsel, conducted a panel presentation at the kick-off of the Philadelphia Public\nthe Mortgage Bankers Association (MBA) Housing Safety Initiative (PHSI). Lucien\nfirst annual National Fraud Issues Blackwell Homes, a newly built family\nconference held in Chicago, IL. The panel development with more than 120 homes, is\ndiscussed numerous topics, including the considered the \xe2\x80\x9cwave of the future\xe2\x80\x9d for\n\n\n Outreach Efforts 125\n\x0c Philadelphia\xe2\x80\x99s housing developments, and audits to OIG and ways in which OIG can\n PHA plans to construct an additional 400 make referrals to the states.\n homes on 17 square blocks encompassing \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Lucien Blackwell Homes. The Philadelphia\n PHSI is one of 10 nationwide PHSIs RIGA Heath Wolfe and SAC Barry\n developed to protect the residents of newly McLaughlin gave a presentation at the\n constructed housing developments from Mortgage Association of Minnesota\xe2\x80\x99s 36th\n fugitive felons, violent crimes, and gang Annual Convention and Trade Show in\n activity. AUSA Richard Barrett requested Minneapolis, MN. SAC McLaughlin\n HUD OIG assistance in providing strategic presented an overview of the latest trends\n information during the development of the in mortgage and real estate fraud. RIGA\n Philadelphia PHSI law enforcement Wolfe\xe2\x80\x99s presentation covered common OIG\n proposal, a proposal developed by the findings during mortgagee audits and\n USAO, and continued assistance as a certifications that violate the Program Fraud\n participating law enforcement partner. SAC Civil Remedies Act (PFCRA).\n for HUD OIG Mid-Atlantic Region, Joseph \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n Clarke, and SA Lou Mancini were invited\n to participate in the press conference by RIGA Frank Baca, ARIGA Theresa\n Philadelphia\xe2\x80\x99s USAO. Other Philadelphia Carroll, and SA Lynelle Kunst presented a\n PHSI law enforcement partners training session to about 30 attendees of the\n participating in the press conference Texas NAHRO conference in Corpus\n included representatives from the U.S. Christi, TX. The presentation covered OIG\xe2\x80\x99s\n Marshals Service (USMS); Bureau of organization and mission and the recent\n Alcohol, Tobacco, Firearms, and Explosives focus on rental assistance overpayments.\n (ATFE); Drug Enforcement Administration \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n (DEA); Philadelphia Police Department;\n PHA Police Department; and other federal, RIGA Edgar Moore gave a presentation\n state, and local officials including Guy to President\xe2\x80\x99s Council on Integrity and\n Ciarrochi, HUD Region 3 Director. HUD Efficiency/Executive Council on Integrity\n OIG continues to actively support and Efficiency (PCIE/ECIE) members who\n Philadelphia\xe2\x80\x99s PHSI investigative efforts. attended the 2006 PCIE/ECIE training\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b conference and retreat in Portsmouth, VA.\n The presentation, entitled \xe2\x80\x9cThe IG\n RIGA Heath Wolfe and SAC Barry Community\xe2\x80\x99s Changing Role in the Wake of\n McLaughlin met with three state auditor\xe2\x80\x99s 911 and Katrina,\xe2\x80\x9d provided an overview of\n offices to explain the role of HUD OIG, Region 2 New York/New Jersey\xe2\x80\x99s work in\n develop lines of communication, and auditing the CDBG Disaster Recovery\n possibly conduct joint audits in the future. Assistance funds. RIGA Moore participated\n On April 3, they met with officials of the in a panel of PCIE awardees from three\n Michigan Auditor General\xe2\x80\x99s office in agencies, who discussed their\n Lansing, MI; on April 5, they met with accomplishments.\n officials of the Minnesota State Auditor\xe2\x80\x99s \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n office in St. Paul, MN; and on April 17, they\n met with officials of the Wisconsin RIGA Heath Wolfe and SA Julien\n Legislative Auditor\xe2\x80\x99s office in Madison, WI. Kubesh made a presentation at the\n They provided a brief background of OIG Supportive Housing Program Start-Up\n and presented information on OIG\xe2\x80\x99s mission Conference in Minnetonka, MN. The\n and the function of the Offices of presentation provided an overview of HUD\n Investigation and Audit. They outlined OIG, which consisted of a brief background\n ways in which the states can refer cases/ of OIG\xe2\x80\x99s missions and goals. RIGA Wolfe\n\n\n126 Outreach Efforts\n\x0cpresented the Office of Audit\xe2\x80\x99s function, and ASACs Ray Espinosa and Brad Geary\nSA Kubesh presented the Office of provided a presentation to the Electronic\nInvestigation\xe2\x80\x99s function. Information was Crimes Commission sponsored by the U. S.\nalso provided on OIG\xe2\x80\x99s role in fraud Secret Service in Chicago, IL. ASACs Espinosa\ninvestigations and the importance of and Geary discussed the latest trends in real\ndocumentation of program expenditures estate and mortgage fraud, along with\nand achievements. There were procedures used in investigating these crimes.\napproximately 85 in attendance. More than 150 individuals representing law\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b enforcement and security personnel from\n banks and private businesses attended.\n RIGA Francis Baca and ARIGA Will \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nNixon gave a presentation at the fall meeting\nof the Oklahoma Chapter of NAHRO in ASAC Diane DeChellis and SA\nNorman, OK. The presentation, prepared Fernando Ramos attended a Criminal Justice\nby Senior Auditor Danita Wade and entitled Advisory Board meeting at Bridgewater\n\xe2\x80\x9cHow to Survive a HUD Audit,\xe2\x80\x9d focused on State College in Bridgewater, MA. ASAC\nhow OIG selects and performs audits, public DeChellis presented and discussed HUD\nhousing findings, and resolution of audits. OIG\xe2\x80\x99s role, mission, and priorities, along\nRIGA Baca and ARIGA Nixon fielded a with the importance of HUD OIG\xe2\x80\x99s\nrange of questions from the group of about partnership with local, state and other\n30 housing executives from across federal law enforcement agencies in\nOklahoma who attended. combating crime. Those in attendance\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b included Timothy Cruz, District Attorney\n for Plymouth County; Linda Balzotti,\n ASAC Tony Meeks and SA David Brockton City Council; and numerous\nCarranza coordinated and hosted a meeting representatives from state and local law\nbetween the Ventura County District enforcement agencies.\nAttorney\xe2\x80\x99s Office Chief Deputy, Bureau of \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nInvestigations personnel, and Executive\nDirectors representing Newbury Park, ASAC Ray Espinosa, along with\nOxnard, Ventura, Port Hueneme, and Santa representatives from the Northern District\nPaula Housing Authorities in Ventura, CA. of Illinois USAO and Chicago Police\nThe purpose of the meeting was to discuss Department, participated in a panel\nHUD rental assistance program fraud presentation at Project Safe Neighborhoods\nschemes and trends. ASAC Meeks and SA National Conference held in Denver, CO.\nCarranza provided an overview of HUD The presentation, known as \xe2\x80\x9cPublic\nOIG\xe2\x80\x99s Fugitive Felon and Sex Offender Housing, Gang Suppression and Deterrent\ninitiatives, identified avenues for housing Strategies,\xe2\x80\x9d described investigative\nauthorities to recognize program fraud, and strategies to help reduce the proliferation of\nshared ideas to develop a more efficient and gang-related activities in public housing\ncoordinated effort between HUD OIG and complexes, HUD OIG resources to support\nthe District Attorney\xe2\x80\x99s office when deterrence, and enforcement initiatives.\ninvestigating and prosecuting housing ASAC Espinosa also discussed HUD OIG\xe2\x80\x99s\nauthority fraud referrals. The Ventura role in assisting Project Safe Neighborhood\nCounty District Attorney\xe2\x80\x99s Chief Deputy operations, initiatives, and task forces by\nexpressed a commitment to combating initiating parallel white-collar investigations\nhousing fraud and providing an expeditious involving tenants, landlords, single-family\nprocess to prosecute individuals fraud, and money laundering.\nfraudulently receiving public funds. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nOutreach Efforts 127\n\x0c ASAC Ruth Valdes met with members Section 8 housing application and its\n of the Domestic Security Task Force (DSTF) evidentiary value during a criminal and/or\n in Palm Beach, FL. ASAC Valdes presented administrative proceeding, and ARIGA\n HUD OIG\xe2\x80\x99s authority, mission, and benefits Shulze provided an overview of OIG\xe2\x80\x99s\n of cooperation between HUD OIG and DSTF organizational structure and function and\n members and provided information relating the mission of OIG\xe2\x80\x99s Office of Audit.\n to Section 8 fraud and HUD OIG initiatives, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n including the Fugitive Felon initiative.\n ASAC Valdes also discussed a possible ASAC Suzanne Steigerwald provided a\n coordination with HUD\xe2\x80\x99s public housing presentation to more than 50 individuals\n personnel for training employees of South attending a NAHRO conference in Keystone,\n Florida public housing authorities to aid CO. ASAC Steigerwald provided an overview\n DSTF response teams in Dade, Broward, and of HUD OIG\xe2\x80\x99s mission and authority and\n Palm Beach Counties. Approximately 40 described fraud detection and enforcement\n DSTF representatives from various federal, methods used to successfully prosecute\n state, and local law enforcement entities investigations.\n attended the meeting. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n ASAC Nadine Gurley presented HUD\n ASAC Nadine Gurley and SA Michelle OIG\xe2\x80\x99s mission and role in preserving the\n Ahmad presented HUD OIG\xe2\x80\x99s mission and integrity of HUD-funded programs at the\n role in preserving the integrity of HUD- Georgia Association of Housing and\n funded programs at the Southeast Redevelopment Authorities (GAHRA) 2006\n Affordable Housing Management spring workshop held in Macon, GA. Topics\n Association (SAHMA) 2006 spring discussed included HUD OIG\xe2\x80\x99s efforts to\n workshop held in Birmingham, AL. Topics identify and eliminate fraudulent schemes\n discussed included HUD OIG\xe2\x80\x99s efforts to in HUD rental assistance, hurricane relief,\n identify and eliminate fraudulent schemes and FHA programs and HUD OIG\xe2\x80\x99s Fugitive\n in HUD rental assistance, hurricane relief, Felon and Missing Children initiatives.\n and FHA programs, along with HUD OIG\xe2\x80\x99s Approximately 75 GAHRA members\n Fugitive Felon and Missing Children attended.\n initiatives. Approximately 75 SAHMA \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n members attended.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b ASAC Suzanne Steigerwald provided a\n presentation to approximately 20 individuals\n The HUD OIG Los Angeles field office attending a Colorado Housing and Finance\n conducted a presentation at the Southern Authority conference in Denver, CO. ASAC\n California Housing Authority Managers Steigerwald provided an overview of HUD\n Association (HAMA) quarterly meeting in OIG\xe2\x80\x99s mission and authority and described\n Oceanside, CA. ASACs Herschell Harvell fraud detection and enforcement methods\n and Tony Meeks provided an overview of used to successfully prosecute\n scheduled presentations and introduced investigations.\n OIG SAs Neil McMullen, Herminia Neblina, \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and John Rodriguez, along with ARIGA\n Tanya Shulze. Seminar topics included ASAC Maureen Nelting, along with SAs\n OIG\xe2\x80\x99s Fugitive Felon, Sexual Offender, and from the U.S. Department of Education\n rental assistance fraud initiatives, in (DOE) OIG and Internal Revenue Service\n addition to HUD\xe2\x80\x99s Enterprise Income (IRS), Criminal Investigations Division\n Verification. Additionally, SA McMullen (CID), participated in a Federal Law\n discussed the benefits of a well-worded Enforcement Officers Association-sponsored\n\n\n128 Outreach Efforts\n\x0cevent in support of National Missing unreported income. As a result,\nChildren\xe2\x80\x99s Day in Boston, MA. ASAC representatives from LBHA, the Long Beach\nNelting and others fingerprinted and Police Department, the Long Beach City\nphotographed 60 children who attend the Prosecutors Office, and Northpointe\nGovernment Center Child Care at the JFK property management personnel developed\nand O\xe2\x80\x99Neill Federal Buildings in Boston. and agreed to participate in a joint\nSince 1983, the United States has observed investigative effort to assist in identifying\nMay 25 as National Missing Children\xe2\x80\x99s Day, tenants violating HUD\xe2\x80\x99s Section 8 programs.\nas a reminder to the nation to renew efforts \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nto reunite missing children with their\nfamilies and to make child protection a ASACs Brad Geary and Ray Espinosa\nnational priority. The National Center for conducted a comprehensive training session\nMissing and Exploited Children for 75 Wisconsin Association of Housing\nspearheaded this event. Authorities employees in Wausau, WI.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b ASACs Geary and Espinosa provided a\n presentation entitled \xe2\x80\x9cCombating Fraud in\n ASAC Brad Geary provided a Assisted Housing\xe2\x80\x9d and described HUD\xe2\x80\x99s\npresentation at a meeting of the Illinois Rental Housing Integrity Improvement\nCoalition of Appraisal Professionals in Program (RHIIP) initiative, HUD OIG\xe2\x80\x99s\nSpringfield, IL. ASAC Geary discussed Fugitive Felon initiative, tenant and landlord\ntypes of fraud in the real estate and fraud schemes, \xe2\x80\x9cred flag\xe2\x80\x9d fraud indicators,\nmortgage industry, presented \xe2\x80\x9cred flag\xe2\x80\x9d and current prosecutorial initiatives within\nindicators, described detection methods, Region 5.\nexplained documenting and reporting \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nallegations, and supplied examples of fraud\ninvestigations to approximately 65 ASAC Herschell Harvell and SAs David\nappraisers in attendance. Carter and Ira Long presented HUD Section\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b 8 fraud investigative efforts at a meeting\n held in San Bernardino, CA, and attended\n ASAC George Dobrovic and SA Dave by the San Bernardino County Sheriff and\nFrederick conducted a real estate and approximately 30 police chiefs from cities\nmortgage fraud seminar for U.S. Secret located throughout San Bernardino County.\nService agents in Cleveland, OH. ASAC SA Carter offered a brief overview of HUD\nDobrovic and SA Frederick discussed how OIG\xe2\x80\x99s organizational structure, jurisdiction,\nto identify fraudulent mortgage files and and mission and described HUD OIG\xe2\x80\x99s role\n\xe2\x80\x9cred flag\xe2\x80\x9d indicators and illustrated how as \xe2\x80\x9clead investigative agency\xe2\x80\x9d in an ongoing\nfake identities and U.S. Treasury checks are joint Section 8 fraud investigative initiative\nused to further mortgage fraud schemes. with the San Bernardino County Sheriff\xe2\x80\x99s\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Department.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n At the request of the Long Beach\nHousing Authority (LBHA), ASAC ASAC Herschell Harvell and ARIGA\nHerschell Harvell participated as a panelist Tanya Schulze presented an overview of\nfor a resident community meeting at LBHA\xe2\x80\x99s HUD OIG\xe2\x80\x99s roles to personnel from LBHA\nNorthpointe housing complex in Long in Long Beach, CA. ARIGA Schulze offered\nBeach, CA. ASAC Harvell described HUD a summary of the HUD OIG Office of\nOIG\xe2\x80\x99s mission and role in preventing fraud, Audit\xe2\x80\x99s organizational structure and\nwaste, and abuse in HUD\xe2\x80\x99s Section 8 discussed the audit process. ASAC Harvell\nprograms and discussed tenant fraud issues described the organizational structure and\ninvolving unauthorized tenancy and Section 8/Sex Offender initiatives of OIG\xe2\x80\x99s\n\n\nOutreach Efforts 129\n\x0c Office of Investigation. Approximately 35 lending institutions across the country. In\n housing authority employees, including the addition, SSA Ellis presented an overview\n Executive Director and LBHA managers, of a Baltimore housing fraud initiative\n attended. investigation resulting in 16 borrowers,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b speculators, real estate agents, loan officers,\n appraisers, and/or settlement agents being\n ASAC Brad Geary provided a convicted of a property-flipping scheme and\n presentation for the Metro Fraud Committee costing FHA millions in claims.\n of Chicago Title Companies in Chicago, IL. \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n ASAC Geary discussed current fraud trends\n in the real estate and mortgage industry and ASAC Brad Geary provided a\n provided examples of investigations, \xe2\x80\x9cred presentation to a meeting of the Illinois\n flags,\xe2\x80\x9d detection, and methods for Coalition of Appraisal Professionals in\n documenting and reporting allegations of Naperville, IL. ASAC Geary discussed\n fraud to law enforcement. Approximately current fraud trends in the real estate and\n 25 title industry personnel attended. mortgage industry, and provided examples\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b of investigations, \xe2\x80\x9cred flags,\xe2\x80\x9d detection, and\n methods for documenting and reporting\n ASAC Suzanne Steigerwald provided an allegations of fraud to law enforcement.\n overview of HUD OIG\xe2\x80\x99s mission and authority Approximately 350 appraisers attended.\n to more than 400 individuals attending a \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n NAHRO conference in Denver, CO. ASAC\n Steigerwald also explained fraud detection ASAC Herschell Harvell and SA Vicky\n and enforcement methods used to Lawson were invited to LBHA, Long Beach,\n successfully prosecute criminal investigations. CA, to speak with property owners and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b managers of the Andy Street Association, an\n association containing several housing units\n ASACs Ray Espinosa and Brad Geary occupied by Section 8 tenants. ASAC\n participated in a panel discussion entitled Harvell presented HUD Section 8 policies\n \xe2\x80\x9cThe Homeownership Preservation and the role of HUD OIG and described the\n Initiative,\xe2\x80\x9d sponsored by Neighborhood collaborative law enforcement efforts\n Housing Services of Chicago and the Federal between HUD OIG, the Long Beach Police\n Deposit Insurance Corporation in Chicago, Department, LBHA, and the City of Long\n IL. The panel discussed current real estate Beach Prosecutor\xe2\x80\x99s Office. Representatives\n fraud, including rescue fraud, flipping, from LBHA, the Long Beach Police\n condo conversions, and straw buyers. Department, and approximately 21 property\n Approximately 15 individuals representing owners and/or managers attended.\n community groups, banks, and law \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n enforcement agencies attended.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b ASACs Kevin Chan and Frank\n Castrogiovanni and SFA Mark Klein met\n ASAC Robert Gale and SSA Daniel Ellis with New York State Division of Housing\n spoke at the Mortgage Bankers Association and Community Renewal (HCR) Assistant\n training seminar entitled \xe2\x80\x9cDetecting and Commissioner Alan Smith, Director Clifford\n Avoiding Mortgage Fraud,\xe2\x80\x9d held in Scott, and Senior Program Representative\n Washington, DC. SSA Ellis, a keynote Vincent Fagon in New York City, NY, to\n speaker, provided information on HUD establish a working relationship with HCR\n OIG\xe2\x80\x99s mission and described mortgage and its staff for assistance in the\n fraud investigations and prosecutions to development of HUD\xe2\x80\x99s Housing Choice\n approximately 30 representatives from Voucher program investigations. HCR\n\n\n130 Outreach Efforts\n\x0coversees numerous HUD-subsidized be audited and audit findings over the past\nhousing complexes within the New York 12 months.\nCity area. During the meeting, ASACs Chan \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nand Castrogiovanni and SFA Klein\ndiscussed HUD OIG\xe2\x80\x99s mission and objective The Offices of Audit and Investigation\ntoward combating fraud, waste, and abuse participated in the 2006 Youth Summit. The\nand removing housing assistance recipients event was held at the Savannah Center\nfrom HUD\xe2\x80\x99s subsidized housing programs. located on the campus of Indiana University\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Northwest, in Gary, IN. ARIGA Kelly\n Anderson and SFA Katherine Bercaw\n ASAC Brad Geary provided a represented Region 5 at the event. They met\npresentation through a video telephone with high school students and shared\nconference in Indianapolis, IN, to more than information about HUD OIG and the career\n150 individuals representing bankruptcy opportunities available.\ncourt personnel and AUSAs from nine \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\njudicial districts in Indiana, Illinois,\nMissouri, Arkansas, and Nebraska. ASAC ARIGA Tom Towers and Auditor\nGeary presented an overview of HUD OIG\xe2\x80\x99s Alexandra Burgess participated in Walsh\nmission and described real estate fraud and College\xe2\x80\x99s career fair in Troy, MI. They spoke\nthe roles of bankruptcy court personnel with students about OIG\xe2\x80\x99s mission and the\nduring bankruptcy fraud prosecutions. benefits of pursuing a student volunteer\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b position with HUD OIG. They accepted 25\n resumes, eight from students who expressed\n ASAC George Dobrovic and SAs James an interest in the student volunteer program\nWaldron and Matt Nutt provided a at OIG\xe2\x80\x99s Detroit Office of Audit.\npresentation outlining aspects and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\ntechniques used in Housing Choice Voucher\nprogram fraud investigations to Michigan ARIGA Ron Farrell and ASAC George\nState Housing Development Authority Dobrovic spoke to more than 60 members\n(MSHDA) employees in Detroit, MI. of the Ohio Conference of Community\nApproximately 45 managers; housing Development, Inc., Columbus, OH. They\nspecialists; department technicians; delivered a presentation on HUD\xe2\x80\x99s mission\nadministrative personnel; and MSHDA statement and strategic goals and discussed\nfinance, homeownership, and family self- how OIG interacts with HUD to accomplish\nsufficiency staff members attended the its mission and goals. They discussed ways\npresentation. in which OIG promotes the integrity,\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b efficiency, and effectiveness of HUD\n programs and operations to assist the\n ASAC Mike Wilson and ARIGA Theresa Department in accomplishing its mission.\nCarroll gave a presentation to more than 35 The discussion focused on how OIG\npublic housing authority officials attending detects and prevents waste, fraud, and abuse\nthe Office of Public Housing\xe2\x80\x99s New in CPD programs through its audits and\nExecutive Director\xe2\x80\x99s Training in the Fort investigations and seeks redress through\nWorth, TX, regional office. The presentation criminal prosecution, civil recoveries, and\nexplained 1) roles and responsibilities of the administrative sanctions for those\nOffices of Investigation and Audit, 2) areas responsible for fraud.\nof fraud which could occur in public \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nhousing and the prosecution process, 3) how\nand why a public housing entity might be\nreviewed by OIG, and 4) areas that might\n\n\nOutreach Efforts 131\n\x0c SA Timothy Lishner provided an SA James Carrieres provided an\n overview of Section 8 Housing Choice overview of HUD OIG and described\n Voucher program fraud schemes at a successful single-family fraud investigations\n \xe2\x80\x9clandlord fair\xe2\x80\x9d sponsored by the Aurora to 41 appraisers attending the Arizona\n Housing Authority in Aurora, CO. The fair Chapter of the National Association of\n provided new and existing landlords an Independent Fee Appraisers meeting held\n opportunity to network and obtain in Phoenix, AZ. SA Carrieres hosted a\n information on managing properties under question and answer forum after his\n the Section 8 Housing Choice Voucher presentation.\n program. SA Lishner encouraged \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n participants to notify HUD OIG when\n encountering any suspected fraud. SA Scott Savedow presented a course\n Approximately 50 current and prospective entitled \xe2\x80\x9cHUD OIG Hurricane Response and\n landlords attended the fair. Fraud Awareness\xe2\x80\x9d at the SAHMA training\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b conference held in Jacksonville, FL. SA\n Savedow discussed the impact and\n SA Neil McMullen provided an consequences of recent hurricanes on HUD\n overview of HUD OIG\xe2\x80\x99s mission and operations and provided examples of\n authority to approximately 50 members of common fraudulent activity in subsidized\n Inglewood Rental Property Owners housing programs. Approximately 300\n Association in Inglewood, CA. In addition, SAHMA representatives attended the\n SA McMullen offered information on conference.\n Inglewood Section 8 fraud investigations \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and prosecutions and explained HUD OIG\xe2\x80\x99s\n successful partnership with the Inglewood SA Nancy Valencic presented HUD\n Police Department in curtailing gang and OIG\xe2\x80\x99s mission in preserving the integrity of\n drug activity. HUD-funded programs at the Tennessee\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Association of Housing and Redevelopment\n Agencies (TAHRA) 2006 workshop held in\n SA Heather Yannello, Auditor Patrick Franklin, TN. SA Valencic discussed\n Anthony, and AUSA Robert Trusiak criminal cases involving tenant, landlord,\n provided a presentation entitled \xe2\x80\x9cFraud, and housing authority employee fraud and\n Flipping, and You, Learn to Detect and provided information relating to HUD OIG\xe2\x80\x99s\n Protect\xe2\x80\x9d at the Buffalo Mayor \xe2\x80\x99s Anti- Fugitive Felon/Missing Children initiatives\n Flipping Task Force seminar held in Buffalo, and hurricane relief efforts. Approximately\n NY. The Mayor\xe2\x80\x99s Anti-Flipping Task Force 50 TAHRA members attended.\n is committed to curbing real estate flipping \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n and fraudulent activity. In Buffalo, this\n activity typically involves the reselling of SA Joshua Stockman provided an\n vacant homes taken over by HUD or the City overview of HUD OIG\xe2\x80\x99s rental assistance\n of Buffalo and slated for demolition with program fraud investigations and successful\n little or no rehabilitation and without an prosecutions in California and Arizona at the\n attorney or title company involved. More Pacific Southwest Regional Council of\n than 200 participants from the Western New NAHRO Annual Spring Conference held in\n York Bar Association, Buffalo Niagara Board Los Angeles, CA. In addition, SA Stockman\n of Realtors, and Appraisal Institute attended discussed prosecutorial merit and the\n the seminar. investigative process from referrals to\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b sentencing, and participants were provided\n information on how to prevent program\n\n\n\n132 Outreach Efforts\n\x0cabuse and assist with fraud investigations. relationship between HUD OIG and RHA\nHousing and redevelopment officials from as it relates to fraud.\nCalifornia, Arizona, and Nevada attended \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nthis conference.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b SA Nelson Sanchez provided an\n overview of HUD OIG\xe2\x80\x99s mission and authority\n SA Julien Kubesh conducted a to more than 50 individuals attending a\npresentation at the North Central NAHRO NAHRO conference in Spearfish, SD. In\nconvention held in Minneapolis, MN. SA addition, SA Sanchez explained fraud\nKubesh outlined HUD OIG\xe2\x80\x99s role in fraud detection and enforcement methods used to\ninvestigations originating from Enterprise successfully prosecute criminal investigations.\nIncome Verification data, the importance of \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\ndocumentation when residents apply for or\nrecertify their housing eligibility, and the SA Cari Williams provided an overview\ncritical need for open communication of HUD OIG, housing assistance fraud\nbetween housing authorities and HUD OIG. investigations, and joint initiatives to\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b approximately 30 police officers at the\n Indianapolis Police Academy in\n SA Jewel Kelley conducted a Indianapolis, IN. The officers in attendance\npresentation at Indiana\xe2\x80\x99s annual NAHRO represented the Indianapolis Police\nconference held in Indianapolis, IN. The Department, Marion County Probation\ntheme of the conference was \xe2\x80\x9cExtreme Office, and other local agencies.\nMakeover,\xe2\x80\x9d and presentations focused on \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nEnterprise Income Verification and Public\nand Indian Housing Information Center SA Scott Savedow conducted a training\ntraining, grant writing, and preventive course entitled \xe2\x80\x9cSubsidized Housing\nmeasures to reduce tenant, landlord, Violations for Law Enforcement\xe2\x80\x9d for\ncontractor, and housing authority personnel Homestead Police Department personnel in\nfraud. SA Kelley provided an overview of Miami, FL. The training provided methods\nHUD OIG\xe2\x80\x99s mission, recent prosecutions, for identifying, investigating, and\nand the responsibilities of housing prosecuting subsidized housing fraud,\nauthorities to assist HUD in securing the along with the requirements necessary for\nintegrity of the Housing Choice Voucher and subsidy terminations under HUD\xe2\x80\x99s \xe2\x80\x9cOne-\nproject-based housing assistance programs. Strike and You\xe2\x80\x99re Out\xe2\x80\x9d regulations.\nApproximately 30 representatives from Approximately 20 officers, detectives, and\nvarious Indiana housing authorities senior law enforcement managers attended\nattended. the course.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n At the request of the Richmond SA Joshua Stockman presented an\nHousing Authority (RHA) housing manager overview of HUD OIG\xe2\x80\x99s mission and role in\nin Richmond, CA, SA Teresa Carson rental assistance and grant fraud\nconducted fraud training for approximately investigations at the Arizona Chapter of\n15 RHA public housing, Section 8, and NAHRO annual training conference in\nmaintenance supervisors. The training Scottsdale, AZ. SA Stockman also described\nconsisted of a brief overview of HUD OIG, the investigative process from referral to\nHUD OIG\xe2\x80\x99s perspective on priority sentencing and provided examples of\ninvestigations and prosecution of housing successful prosecutions in both Arizona and\nfraud, \xe2\x80\x9cred-flag\xe2\x80\x9d fraud indicators, possible California. Housing and redevelopment\nsolutions to combating fraud, and the\n\n\nOutreach Efforts 133\n\x0c officials representing 20 Arizona cities findings, fraud and internal controls, and\n attended. audit resolution.\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n SA James Carrieres provided an SA Christopher Conn presented HUD\n overview of HUD OIG and described OIG\xe2\x80\x99s mission and role in rental assistance\n successful single-family fraud fraud investigations at the annual Mid-\n investigations at a Las Vegas Chapter of the America Crime Free Conference entitled\n Appraisal Institute meeting in Las Vegas, \xe2\x80\x9cCombating Welfare Fraud,\xe2\x80\x9d held in Blue\n NV. Approximately 45 individuals from Springs, MO. In addition, SA Conn\n Arizona and Nevada attended. described fraud identification and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b prosecution issues and common fraud\n prevention methods and provided case\n SA Eric Huhtala presented a general studies of successful fraud prosecutions.\n overview of HUD OIG\xe2\x80\x99s mission and role in Approximately 88 individuals representing\n investigating and prosecuting fraud to a spectrum of professions attended.\n Vallejo Housing Authority (VHA) housing \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n specialists, inspectors, and management in\n Vallejo, CA. SA Huhtala described how SA Charles Grace presented HUD OIG\xe2\x80\x99s\n fraud cases are identified and prosecuted role in maintaining the integrity of various\n and provided proactive prevention ideas for HUD-funded rental assistance programs at\n VHA personnel to implement in their day- a meeting of the Southeast Precinct\n to-day operations and contacts with Interagency Coordination held at the Seattle\n program participants. Police Department, Seattle, WA. Topics\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b discussed included crime in Seattle Housing\n Authority\xe2\x80\x99s public housing developments,\n SA Kathleen Hatcher presented HUD and concepts to address this issue were\n OIG\xe2\x80\x99s mission; FHA fraud and predatory shared. A spokesperson from the Seattle\xe2\x80\x99s\n lending schemes; and criminal, civil, and Mayor\xe2\x80\x99s office, law enforcement personnel,\n administrative remedies at a Mortgage and representatives from various\n Banker\xe2\x80\x99s Association conference entitled community agencies attended.\n \xe2\x80\x9cNext Steps in Combating Mortgage Fraud\xe2\x80\x9d \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n in Long Beach, CA. In addition, SA Hatcher\n discussed specific fraud investigations and RIGA Ron Hosking, ARIGA Kim\n encouraged mortgage industry personnel to Randall, and Computer Audit Specialist\n contact HUD OIG when encountering fraud (CAS) Glenn Brock met with auditors at the\n schemes. Approximately 50 individuals Legislative Division of Post Audit for the\n attended the conference. State of Kansas in Topeka, KS. ARIGA\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Randall gave a presentation that explained\n OIG\xe2\x80\x99s mission and authority, organizational\n SA Lynelle Kunst, assisted by SA Danita structure, audit planning process, types of\n Wade and ARIGA Will Nixon, gave a audits conducted, and the reporting process.\n presentation at a meeting of North Texas CAS Brock presented the role of the\n Association of Housing Authorities in Fort Information Systems Audits Division in the\n Worth, TX. The group consisted of about OIG audit framework and the function of\n 40 administrators and managers of public the CAS position in the audit environment.\n housing authorities in North Texas. The He discussed OIG\xe2\x80\x99s use of general software\n presentation covered background on HUD applications and the Department\xe2\x80\x99s systems\n OIG, how it selects audits, common inventory. RIGA Hosking, ARIGA Randall,\n and CAS Brock, along with Legislative\n\n\n134 Outreach Efforts\n\x0cDivision of Post Audit staff, then discussed RIGA Heath Wolfe and SAC Barry\njoint audits each agency had conducted in McLaughlin gave presentations to the\nthe past and how the agencies might work Michigan State Chapter of NAHRO Fall\ntogether in the future. Conference on September 28, 2006, in\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b Lansing, MI. RIGA Wolfe and SAC\n McLaughlin presented background\n CAS Glenn Brock participated in the information on HUD OIG, OIG\xe2\x80\x99s mission,\nMissouri Society of Certified Public public housing authorities, common audit\nAccountants\xe2\x80\x99 Kansas City Chapter Career findings, and the \xe2\x80\x9cred flags\xe2\x80\x9d of fraud.\nNight in Kansas City, KS. CAS Brock Approximately 45 NAHRO members were\nimparted OIG\xe2\x80\x99s mission and career\n in attendance.\nopportunities to the 50 students and \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\naccounting professionals in attendance. He\nprovided information related to current\n RIGA Heath Wolfe and SAC Barry\nauditor and investigator positions within\n McLaughlin met with the State of Indiana\xe2\x80\x99s\nOIG and a synopsis of OIG\xe2\x80\x99s function as an\n State Board of Accounts in Indianapolis, IN.\naudit organization.\n The State Board of Accounts has oversight\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n of the State of Indiana\xe2\x80\x99s departments/\n agencies, public housing authorities, local\n CAS Glenn Brock participated in the\n municipalities, and nonprofit agencies. SAC\nMissouri Society of Certified Public\n McLaughlin and RIGA Wolfe met with the\nAccountants\xe2\x80\x99 LEAP (Lead and Enhance the\n organization to explain the role of HUD OIG,\nAccounting Profession) Fall Mixer in Lee\xe2\x80\x99s\n develop lines of communication, and discuss\nSummit, MO. CAS Brock discussed OIG\xe2\x80\x99s\n the possibly of conducting joint audits in the\nmission and career opportunities with the\n future. They provided the office a brief\n35 students and an accounting instructor in\n background on HUD OIG and presented\nattendance. He provided information\n information on OIG\xe2\x80\x99s mission and the\nrelated to current auditor and investigator\n functions of the Offices of Investigation and\npositions available within OIG and a\n Audit. They outlined ways in which the\nsynopsis of OIG\xe2\x80\x99s function as an audit\n state can refer cases/audits to OIG and ways\norganization. He also discussed computer\n in which OIG can make referrals to the state.\nsystems audits performed by the\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nInformation Systems Audits Division and\nthe CAS role in the OIG audit environment.\n ARIGA Kelly Anderson gave a\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n presentation at the Peer-to-Peer Homeless\n Conference held in Collinsville, IL. The\n ASAC Maureen Nelting, RIGA John\n audience was comprised of administrators\nDvorak, and ARIGA Kevin Smullen\n of supportive housing grants. Kelly gave\npresented HUD OIG\xe2\x80\x99s mission and priorities\n the attendees an overview of HUD OIG and\nand described successful investigations/\n OIG\xe2\x80\x99s activities as they relate to CPD\naudits and \xe2\x80\x9cred flag\xe2\x80\x9d indicators for\n programs. There were approximately 50\ndetecting tenant, landlord, and housing\n people in attendance.\nauthority employee fraud to\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\nrepresentatives of the New England\nElderly Housing Association at Monsignor\n RIGA Heath Wolfe and SAC Barry\nNeagle Apartments in Malden, MA.\n McLaughlin met with officials of the State\nApproximately 30 individuals from private\n of Illinois\xe2\x80\x99 Office of the Auditor General in\nmanagement companies and public housing\n Springfield, MA, to explain the role of HUD\nauthorities attended.\n OIG, develop lines of communication, and\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b\n\n\n\n\nOutreach Efforts 135\n\x0c discuss the possibly of conducting joint The Region 5 Office of Audit\n audits in the future. SAC McLaughlin and participated in the 2006 Business and Liberal\n RIGA Wolfe provided the office a brief Arts Job Fair. The event was held in the\n background on HUD OIG and presented Student Union building on the Northeastern\n information on OIG\xe2\x80\x99s mission and the Illinois University campus in Chicago, IL,\n functions of the Offices of Investigation and and was sponsored by the Northeastern\n Audit. They outlined ways in which the Illinois University Placement Office.\n state can refer cases/audits to OIG and ways Auditors Anthony Smith and Eric\n in which OIG can make referrals to the state. Linderman represented Region 5 at this\n \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b \xe2\x97\x8b event. They met with students to promote\n HUD OIG and recruit for current available\n positions as student volunteers and future\n entry-level auditor positions.\n\n\n\n\n136 Outreach Efforts\n\x0c Chapter 9\nLegislation, Re\nLegislation, gulations,,\n gulations\n Regulations\n and Other Dir ecti\n Directi ves\n ectiv\n\x0c Reviewing and making HUD pr oposed the cr\n proposed eation\n creation\n recommendations on legislation, regula-\n tions, and policy issues is a critical part of\n of an Independent Public\n the Office of Inspector General\xe2\x80\x99s (OIG) Accountant Re gister\n Register\n responsibilities under the Inspector\n General Act. During this 6-month HUD proposed a rule to create a registry\n reporting period, OIG reviewed 136 of Independent Public Accountants\n issuances. This chapter highlights some performing audits of HUD programs. OIG\n of OIG\xe2\x80\x99s prior comments on notices, did not concur with HUD\xe2\x80\x99s proposal and\n comments for this reporting period, and HUD is considering OIG\xe2\x80\x99s comments.\n other policy directives.\n Notices\n Proposed Rules\n Proposed\n Wai\n aivver\n erss ffor\n or the State of\n HUD pr oposed an interim rrule\n proposed ule Louisiana Community\n for pr oject-based vvouc\n project-based ouc her rrents\n oucher ents De\n Devvelopment Bloc k Grant\n Block\n for units rrecei\n eceivin\n eceivin g lo\n ving w-income\n low-income (CDBG) Disaster Reco Recovver\n eryy Grant\n housin\n housing g tax cr edits to allo\n credits w ffor\n allow or\n a higher rrent\n higher ent than allo wed in\n allow OIG commented on HUD\xe2\x80\x99s proposed\n notice because the notice failed to include a\n the Lo w Income Housin\n Low Housingg TTax\n ax provision in the public law. Specifically, the\n Cr edit (LIHTC) pr\n Credit ogram\n pro law limits on the amount of CDBG funds\n that can be used as a matching share for\n OIG reported on this issue in the prior emergency situations. OIG requested that\n semiannual report. OIG did not concur with HUD include a provision in this waiver for\n a proposed interim rule since it did not the State of Louisiana CDBG Disaster\n allow for a comment period before Recovery grant that states no more than\n implementation and because HUD did not $250,000 may be used for the nonfederal\n provide support for the proposed action. In costshare of any project funded through the\n response to OIG\xe2\x80\x99s comments, HUD agreed U.S. Army Corps of Engineers.\n to issue the rule as a proposed rule, thereby\n permitting public comment prior to\n implementation. Essentially, the rule would\n Mortg\n tgaagee Letter\n Mortg Letterss\n allow PHAs the option to pay project-\n based voucher rents that exceed the Nonpr ofit Do\n Nonprofit wnpa\n Downpa yment Gift\n wnpayment\n maximum allowable tax credit rent for Pr\n Proovider\n viderss\n units receiving assistance under the\n LIHTC program. As part of the comment\n process, HUD should consider that each HUD drafted a mortgagee letter\n Section 8 dollar in excess of the LIHTC rent regarding nonprofit \xe2\x80\x9cdownpayment\n limit reduces the amount of Section 8 funds assistance providers.\xe2\x80\x9d OIG reported a\n available to assist other low-income nonoccurrence on the letter in last\n families in meeting their housing needs. reporting period. The Department was\n reviewing OIG\xe2\x80\x99s nonconcurring comments\n at the end of the previous semiannual\n reporting period. HUD continues to work\n on a notice for using nonprofits to provide\n\n\n\n\n138 Legislation, Regulations, and Other Directives\n\x0cdownpayment assistance. A recent to reducing insurance risk. OIG\nInternal Revenue Service (IRS) ruling is also nonconcurred because the certification is a\nimpacting HUD\xe2\x80\x99s development of the notice. critical document in supporting and\nOIG and HUD continue to communicate enforcing departmental remedies for\nabout the use of nonprofit downpayment noncompliance, and, therefore, OIG\nassistance and the number of Federal disagrees with its proposed elimination.\nHousing Administration (FHA) foreclosures OIG has done significant testing of \xe2\x80\x9clate\nrelated to this assistance. OIG continues to endorsement\xe2\x80\x9d compliance by major direct\nhave many concerns related to nonprofit endorsement lenders as part of its audit\ndownpayment assistance. focus on FHA single-family lending\n practices beginning in 2004. OIG found that\nLate Request ffor\n or Endor sement\n Endorsement lenders certified full compliance and\n eligibility for FHA insurance when some\nPr ocedur\nProcedur es/Cer\n ocedures/Cer tification\n es/Certification loans were not eligible because the\nEliminated, Pr oposed\n Proposed borrowers were in arrears on their mortgage\nMor\nMortgtg\n tgaagee Letter payments. OIG also issued a report this\n reporting period that questioned HUD\xe2\x80\x99s\n In the prior period, HUD drafted a analysis on allowing late endorsements.\nmortgagee letter to remove the certification OIG continues to have concerns regarding\nrequirement from FHA\xe2\x80\x99s late endorsement HUD\xe2\x80\x99s taking little action against lenders for\nprocedures. HUD believes the certification late endorsement, and recommended that\nrequirement does not materially contribute the mortgage letter be rescinded.\n\n\n\n\nLegislation, Regulations, and Other Directives 139\n\x0c\x0c Chapter 10\nAudit Resolution\n\x0c In the audit resolution process, Office nonprofit organization\xe2\x80\x99s bid by less than 10\n of Inspector General (OIG) and U.S. percent, HUD awarded the nonprofit\n Department of Housing and Urban organization the property, not the owner-\n Development (HUD) management agree occupant applicant. In OIG\xe2\x80\x99s opinion, the\n upon the needed actions and timeframes for awards violated the intent of the discount\n resolving audit recommendations. Through sales program, which was to provide low-\n this process, OIG hopes to achieve cost housing opportunities to homebuyers.\n measurable improvements in HUD OIG recommended that HUD\xe2\x80\x99s\n programs and operations. The overall requirements be changed so that, if an owner\n responsibility for assuring that the occupant homebuyer submitted a bid which\n agreed-upon changes are implemented rests was higher than the net bid of a nonprofit\n with HUD managers. This chapter organization after taking into consideration\n describes significant pending issues for the nonprofit organization\xe2\x80\x99s allowed\n which resolution action has been delayed. discount, the owner-occupant homebuyer\n It also contains a status report on HUD\xe2\x80\x99s would be awarded the property. This would\n implementation of the Federal Financial meet the intent of providing low-cost\n Management Improvement Act of 1996 housing opportunities to low- and moderate-\n (FFMIA). In addition to this chapter on income homebuyers without having to go\n audit resolution, see appendix 2, table A, through a middleman; i.e., the nonprofit\n \xe2\x80\x9cAudit Reports Issued before Start of Period organization, which simply increased the\n with No Management Decision as of price of the property to the ultimate\n September 30, 2006,\xe2\x80\x9d and table B, homebuyer.\n \xe2\x80\x9cSignificant Audit Reports Described in\n Previous Semiannual Reports in Which On January 22, 2002, HUD concurred\n Final Action Had Not Been Completed as of with OIG\xe2\x80\x99s recommendation. HUD and OIG\n September 30, 2006.\xe2\x80\x9d agreed to a December 31, 2002, target date\n for implementation of the changes necessary\n Dela\n Delayyed Actions to address OIG\xe2\x80\x99s recommendation,\n including revising existing regulations.\n Before revising the regulations, however,\n Nonpr ofit Par\n Nonprofit ticipation in Sin\n Participation gle\n Sing HUD decided that, due to changes in its\n Famil\n amilyy Pr\n Proograms\n rams,, Nation wide\n Nationwide management and marketing service\n contracts, many additional changes to the\n Audit current regulations affecting HUD\xe2\x80\x99s sale of\n its REO property inventory were necessary.\n Issued November 5, 2001 - HUD\xe2\x80\x99s existing HUD stated that the previously agreed to\n regulations relating to the sale of HUD real changes addressing OIG\xe2\x80\x99s recommendation\n estate-owned (REO) properties gave priority were to be included in these revised\n to nonprofit organizations over owner- regulations. Accordingly, HUD requested\n occupant homebuyers for properties that the target date for implementation of\n involving a 10 percent nonprofit discount. the regulations and clearing OIG\xe2\x80\x99s\n If a nonprofit organization and an owner- recommendation be extended until June of\n occupant homebuyer submitted bids to 2003. HUD did not meet this target date and,\n purchase an REO property, HUD did not in June 2004, informed OIG that the changes\n take into consideration the nonprofit to the regulations were still in process. HUD\n organization\xe2\x80\x99s 10 percent discount when requested another extension of the target\n determining the highest bidder. date for implementation of corrective actions\n Accordingly, if an owner-occupant to June 30, 2005. Reluctantly, OIG agreed to\n purchaser submitted a bid to purchase an this extension. In August 2005, HUD again\n REO property and the bid exceeded a informed OIG that the regulations were still\n\n\n142 Audit Resolution\n\x0cunder development and requested another\nextension to September 30, 2006. OIG\n Federal FFinancial\n inancial\nagreed to the request. Mana\n Manag gement\n As of September 30, 2006, HUD has not Impr\n Improovement Act of\nfinalized and implemented the regulations\nor addressed the problems OIG brought to 1996\nHUD\xe2\x80\x99s attention in November 2001. HUD\nhas indicated that it will request another FFMIA requires that HUD implement\nextension to October 31, 2007, as the a remediation plan that will bring financial\nproposed regulations remain at the systems into compliance with federal\npreclearance draft stage. OIG will not financial management system requirements\nconcur with any further extension requests within 3 years or obtain Office of\nas it has now been almost 5 years since Management and Budget (OMB)\nreport issuance and HUD has still not concurrence if more time is needed.\nimplemented the promised actions. (Report\nNo 2002-SF-0001) FFMIA requires OIG to report in its\n semiannual reports to the Congress\nSignificant Mana\nSignificant gement\n Manag instances and reasons when an agency has\nDecision with W hic\n Whic h OIG\n hich not met the intermediate target dates\n established in its mediation plan required\nDisagrees\nDisag by FFMIA. In April 1998, HUD determined\n that 38 of its systems were not in substantial\n There are no reports issued before the\n compliance with FFMIA. At the end of 2005,\nbeginning of the reporting period for which\n the Department reported that 2 of its 44\na management decision had not been made\n financial management systems were not in\nby the end of the period.\n substantial compliance with FFMIA. These\n two systems are Loan Accounting System\n (LAS) and Facilities Integrated Resources\n Management System (FIRMS). HUD\n reported FIRMS as noncompliant in its 2005\n self-assessment. HUD replaced LAS with a\n commercial off-the-shelf software package\n at the end of July 2006. As of September 30,\n 2006, the Department reports that the above\n two systems are in substantial compliance\n with FFMIA pending independent\n verification.\n\n\n\n\nAudit Resolution 143\n\x0c\x0c Appendix 1\nAudit Repor ts Issued\n Reports\n\x0c Internal Repor\n Internal ts\n Reports\n 13 Audit Repor ts\n Reports\n Chief Information Officer (3 Reports)\n 2006-DP-0005 Review of HUD\xe2\x80\x99s Information Technology Contingency Planning and\n Preparedness, 08/31/2006.\n 2006-DP-0802 Assessment of HUD\xe2\x80\x99s Compliance with OMB Memorandum M-06-16,\n \xe2\x80\x9cProtection of Sensitive Agency Information\xe2\x80\x9d, 09/21/2006.\n 2006-DP-0803 OIG Response to Questions from the OMB under Federal Information\n System Management Act of 2002, 09/29/2006.\n Chief Procurement Officer (1 Report)\n 2006-AT-0001 The Procurement Office Did Not Maintain Complete Contract Files,\n 08/29/2006.\n Community Planning and Development (1 Report)\n 2006-CH-0003 The Congressional Grants Division\xe2\x80\x99s Oversight of Economic\n Development Initiative-Special Purpose Grants Needs to be Improved,\n Washington, DC, 07/21/2006.\n Housing (4 Reports)\n 2006-KC-0002 HUD\xe2\x80\x99s Systems Usually Prevent Credit Watch-Terminated Lenders\n from Originating HUD-Insured Loans, but Brief Searches Could Find\n Additional Loans That Weren\xe2\x80\x99t Prevented, 06/14/2006. Questioned:\n $164,523.\n 2006-NY-0001 HUD\xe2\x80\x99s Controls Over the Reporting, Oversight, and Monitoring of the\n Housing Counseling Assistance Program Were Not Adequate, 06/08/2006.\n 2006-SE-0001 Significant Weaknesses in HUD\xe2\x80\x99s Oversight of Single-Family Mortgage\n Insurance Claims are Costly, 07/11/2006. Questioned: $1,301,230;\n Unsupported: $1,301,230; Better Use: $214,000,000.\n 2006-SE-0002 The Office of Single-Family Housing Expanded Late Endorsement\n Eligibility Without Studying Associated Risks, 08/16/2006.\n Public and Indian Housing (4 Reports)\n 2006-BO-0001 HUD Incorrectly Approved $42 Million in Operating Subsidies for\n Phase-Down for Demolition Add-On Funding, 07/11/2006. Questioned:\n $35,755,661; Unsupported: $15,153,923; Better Use: $6,361,640.\n 2006-CH-0002 PIH is Taking Action to Oversee the Section 202 Mandatory Conversion\n Program, Washington, DC, 07/13/2006.\n 2006-KC-0003 HUD Did Not Ensure That the Omaha Housing Authority Repaid its\n Public Housing Programs $2.7 Million, Omaha, NE, 06/19/2006. Better\n Use: $2,751,317.\n 2006-PH-0002 HUD Improperly Admitted the Housing Authority of Baltimore City into\n the MTW Demonstration Program, Baltimore, MD, 05/31/2006.\n\n\n Audit-Related Memoranda\n Housing (1 Report)\n 2006-FW-0801 Review of Partial Claim Option to Foreclosure under HUD\xe2\x80\x99s Loss\n Mitigation Program, 04/10/2006.\n\n146 Audit Reports Issued\n\x0cPublic and Indian Housing (1 Report)\n2006-KC-0801 HUD\xe2\x80\x99s Oversight of PHA Processes for Prohibiting Criminal Activity,\n 04/13/2006.\n\n\n\nExternal Repor\nExternal ts\n Reports\n74 Audit Reports\n Reports\nCommunity Planning and Development (10 Reports)\n2006-AT-1014 The State of Florida Lacked Adequate Procedures to Prevent Possible\n Duplicate Disaster Recovery Benefits to Recipients, Tallahassee, FL,\n 07/26/2006.\n2006-AT-1016 The Municipality of Humacao Did Not Administer its CDBG in\n Accordance with HUD Requirements, Humacao, PR, 07/28/2006.\n Questioned: $3,970,071; Unsupported: $3,800,945; Better Use: $318,853.\n2006-AT-1019 The Municipality of Toa Baja Did Not Administer its Section 108 Loan\n Guarantee Assistance Program in Accordance with HUD Requirements,\n Toa Baja, PR, 09/06/2006. Questioned: $4,950,106; Unsupported:\n $4,879,737.\n2006-FW-1014 The City of Fort Worth Has Made Significant Improvements in\n Procedures for Drawing Down CDBG Funds, Fort Worth, TX, 08/16/2006.\n2006-LA-1015 Institute for Urban Research and Development Did Not Properly\n Administer its Supportive Housing Program Grants, El Monte, CA,\n 07/19/2006. Questioned: $1,268,433; Unsupported: $1,268,433.\n2006-LA-1016 Los Angeles Family Housing Corporation Generally Administered its\n Supportive Housing Program Grants in Accordance with HUD\n Requirements, North Hollywood, CA, 07/20/2006.\n2006-LA-1019 The City of Modesto Did Not Always Administer its CDBG in\n Compliance with Government Regulations, Modesto, CA, 09/07/2006.\n Questioned: $68,379.\n2006-NY-1013 Lower Manhattan Development Corporation, CDBG Disaster Recovery\n Assistance Funds, New York, NY, 09/27/2006. Questioned: $3,053; Better\n Use: $186,749.\n2006-PH-1013 The Commonwealth of Virginia Did Not Ensure HOME Funds Were\n Disbursed and Used in Accordance with Federal Regulations, Richmond,\n VA, 09/18/2006. Questioned: $710,766; Unsupported: $527,060; Better Use:\n $3,273,545.\n2006-SE-1003 Snohomish County\xe2\x80\x99s Office of Housing and Community Development\n Charged Ineligible Administrative Expenses to its CDBG, Everett, WA,\n 05/31/2006. Questioned: $67,339; Better Use: $67,339.\nHousing (22 Reports)\n2006-AO-1001 Southwest Alliance of Asset Managers, LLC, Did Not Effectively\n Enforce the Lease Terms Over Payment of Property Utilities, Addison,\n TX, 06/23/2006. Questioned: $79,306.\n2006-AO-1002 Cityside Management Corporation Did Not Enforce the Lease Terms\n Over Payment of Property Utilities, Hammond, LA, 08/31/2006.\n Questioned: $17,744.\n\n\nAudit Reports Issued 147\n\x0c 2006-AT-1018 Taylor, Bean and Whitaker, Inc., Met Temporary Interest Rate\n Buydown Requirements, Ocala, FL, 08/28/2006.\n 2006-BO-1007 Capital Mortgage Associates LLC Did Not Always Comply with HUD\n Requirements Regarding its Single-Family Loan Originations and\n Quality Control Plan, North Haven, CT, 06/02/2006. Questioned:\n $3,875.\n 2006-BO-1008 Hall Commons Inc. Did Not Administer its $4.1 Million Section 202\n Capital Advance Construction Grant in Accordance With Federal\n Requirements, Bridgeport, CT, 06/30/2006. Questioned: $206,891;\n Unsupported: $154,073; Better Use: $4,079,100.\n 2006-BO-1009 The Rhode Island Housing and Mortgage Finance Corporation\n Incorrectly Made More Than $1.8 Million in Section 8 Subsidy\n Payments and Released More Than $900,000 from Restricted Residual\n Receipts Accounts, Providence, RI, 07/06/2006. Questioned: $2,800,258.\n 2006-CH-1014 National City Mortgage Company, Nonsupervised Lender, Did Not\n Comply with HUD\xe2\x80\x99s Requirements Regarding Underwriting of Loans\n and Quality Control Reviews, Miamisburg, OH, 07/31/2006.\n Questioned: $145,101; Unsupported: $94,372; Better Use: $677,713.\n 2006-CH-1015 Birmingham Bancorp Mortgage Corporation, Nonsupervised Lender,\n Substantially Complied with HUD\xe2\x80\x99s Requirements Regarding\n Underwriting of Loans but Not its Quality Control Reviews, West\n Bloomfield, MI, 09/25/2006. Questioned: $47,103; Unsupported:\n $47,103.\n 2006-CH-1017 Community Central Bank, Supervised Lender, Generally Complied\n with HUD\xe2\x80\x99s Requirements Regarding Underwriting of Loans but Not\n its Quality Control Reviews, Mount Clemens, MI, 09/26/2006.\n Questioned: $22,752; Unsupported: $22,752; Better Use: $41,280.\n 2006-DE-1004 Juniper Communities Did Not Comply with Its Regulatory Agreement\n or HUD Regulations in Managing its FHA-Insured Projects,\n Bloomfield, NJ, 07/18/2006. Questioned: $293,387; Better Use:\n $1,042,515.\n 2006-DE-1005 Utah Non Profit Housing Corporation Did Not Ensure Properties\n Generated Sufficient Income and Did Not Comply With Cost\n Allocation and HUD Requirements, Salt Lake City, UT, 07/28/2006.\n Questioned: $70,755; Better Use: $30,900.\n 2006-DE-1006 Nexgen Lending, Inc.\xe2\x80\x99s Lakewood Branch Did Not Follow HUD\n Requirements in Underwriting Two Insured Loans, Lakewood, CO,\n 08/31/2006. Questioned: $1,171; Better Use: $60,051.\n 2006-FW-1010 Deer Creek Apartments\xe2\x80\x99 Previous Management Agent Paid Itself\n Unsupported Fees, Houston, TX, 05/11/2006. Questioned: $24,312;\n Unsupported: $24,312.\n 2006-FW-1011 Premier Mortgage Funding, Inc. and Its Sponsor, JPMorgan Chase,\n Did Not Comply With HUD Underwriting Requirements and Did Not\n Meet All Quality Control Requirements, Austin, TX, 06/16/2006.\n Questioned: $394,273; Better Use: $187,648.\n 2006-KC-1011 The Owner of Wellston Townhouses in St. Louis County Violated its\n Regulatory Agreement, Wellston, MO, 06/29/2006. Questioned:\n $200,288; Unsupported: $88,794; Better Use: $104,372.\n\n\n\n\n148 Audit Reports Issued\n\x0c2006-KC-1012 The Owner of HDC Retirement Village In St. Louis Violated its\n Regulatory Agreement, St. Louis, MO, 06/29/2006. Questioned:\n $193,421; Unsupported: $166,812; Better Use: $28,395.\n2006-LA-1011 Sundial Care Center Used $659,746 in Project Funds for Ineligible and\n Undocumented Costs and Was Unable to Account for Revenue\n Totaling $407,454, Modesto, CA, 05/18/2006. Questioned: $1,067,200;\n Unsupported: $701,405.\n2006-LA-1014 KB Home Mortgage Failed to Ensure Underwriting Certifications for\n FHA Loans Were Accurate, Los Angeles, CA, 07/17/2006.\n2006-LA-1018 First Magnus Financial Corporation Did Not Comply with HUD\n Guidelines When Underwriting Six FHA-Insured Loans, Tucson, AZ,\n 07/26/2006. Better Use: $95,151.\n2006-NY-1007 First Suffolk Mortgage Corporation Did Not Always Comply with\n HUD Underwriting Requirements, North Babylon, NY, 06/19/2006.\n Questioned: $153,044; Unsupported: $152,814; Better Use: $76,958.\n2006-NY-1009 First Residential Mortgage Services Corporation Did Not Always\n Comply With HUD/FHA Loan Origination Requirements, Englewood\n Cliffs, NJ, 08/14/2006. Questioned: $64,714; Unsupported: $64,219;\n Better Use: $424,384.\n2006-PH-1012 Trident Mortgage Company Issued and Submitted for Endorsement\n Loans with an Increased Risk of Defaults and Claims, Devon, PA,\n 07/19/2006. Questioned: $79,671; Unsupported: $79,525; Better Use:\n $487,075.\nLead Hazard Control (1 Report)\n2006-LA-1013 The Child Abuse Prevention Council of Sacramento Did Not\n Adequately Administer Its Healthy Homes Initiative Grant, North\n Highlands, CA, 07/17/2006. Questioned: $936,879; Unsupported:\n $586,039; Better Use: $472,523.\nPublic and Indian Housing (41 Reports)\n2006-AT-1008 The Housing Authority of the City of Macon\xe2\x80\x99s Controls for Expending\n Low-Income Housing and HOPE VI Program Funds and Safeguarding\n Low-Income Housing Assets Were Inadequate, Macon, GA, 04/25/2006.\n Questioned: $395,211; Better Use: $125,000.\n2006-AT-1009 The Metropolitan Development and Housing Agency Did Not Ensure\n Section 8-Assisted Units Were Decent, Safe and Sanitary, Nashville,\n TN, 05/18/2006. Better Use: $8,791,956.\n2006-AT-1010 The Orlando Housing Authority Did Not Ensure That All Section 8\n Units Met Housing Quality Standards and Paid Excessive Subsidies for\n Some Units, Orlando, FL, 05/31/2006. Questioned: $41,867; Better Use:\n $1,146,708.\n2006-AT-1011 The Housing Authority of the City of Raleigh Generally Administered\n its Housing Choice Voucher Program in Accordance with\n Requirements, Raleigh, NC, 06/19/2006. Questioned: $7,012.\n2006-AT-1012 The Miami Dade Housing Agency Paid Housing Choice Voucher\n Program Funds for Some Overhoused Tenants, Miami, FL, 06/28/2006.\n Questioned: $61,862; Better Use: $81,828.\n\n\n\n\nAudit Reports Issued 149\n\x0c 2006-AT-1013 The Housing Authority of the City of North Charleston\n Inappropriately Pledged Assets to Secure a Loan and Caused Delays in\n its Oakleaf Homeownership Program, North Charleston, SC,\n 07/12/2006. Better Use: $400,000.\n 2006-AT-1015 The Municipality of Bayamon Housing Authority Did Not Ensure\n Section 8-Assisted Units Were Decent, Safe, and Sanitary, Bayamon,\n PR, 07/27/2006. Better Use: $1,434,456.\n 2006-AT-1017 The Housing Authority of Lawrence County Spent More Than $71,000\n for Questionable Purchases, Lawrence County, KY, 08/17/2006.\n Questioned: $71,741; Unsupported: $71,741.\n 2006-AT-1020 The Jacksonville Housing Authority\xe2\x80\x99s Section 8 Units Met HUD\n Housing Quality Standards, Jacksonville, FL, 09/15/2006.\n 2006-BO-1010 Boston Housing Authority Used Voucher Program Funds to Pay State\n Housing Assistance Program Expenses and Needs to Improve Its Rent\n Reasonableness Process, Boston, MA, 07/26/2006.\n 2006-BO-1011 The Portland Housing Authority Did Not Use Reserve Funds or\n Properly Allocate Employee Costs, Resulting in Questioned Costs of\n More Than $850,000, Portland, ME, 08/28/2006. Questioned: $805,848;\n Better Use: $44,336.\n 2006-CH-1009 The Youngstown Metropolitan Housing Authority Did Not Use Public\n Housing Operating Funds Effectively and Efficiently, Youngstown,\n OH, 04/18/2006. Questioned: $99,673; Unsupported: $99,673.\n 2006-CH-1010 The Benton Harbor Housing Commission Lacked Supporting\n Documentation and Did Not Follow Procurement Requirements\n Regarding its Public Housing Capital Fund Program, Benton Harbor,\n MI, 05/18/2006. Questioned: $206,724; Unsupported: $206,224.\n 2006-CH-1011 The Columbus Metropolitan Housing Authority Did Not Effectively\n Operate its Section 8 Housing Program, Columbus, OH, 07/06/2006.\n Questioned: $415,385; Unsupported: $332,070; Better Use: $7,546,384.\n 2006-CH-1012 The Housing Authority of the County of Cook Needs to Improve its\n Section 8 Housing Program Administration, Chicago, IL, 07/11/2006.\n Questioned: $123,118; Better Use: $10,095,840.\n 2006-CH-1013 The Ann Arbor Housing Commission\xe2\x80\x99s Administration of its Section 8\n Housing Choice Voucher Program Needs to Be Improved, Ann Arbor,\n MI, 07/21/2006. Questioned: $58,540; Better Use: $1,997,134.\n 2006-CH-1016 Pickaway Metropolitan Housing Authority Improperly Used\n Homeownership Sales Proceeds to Fund its Nonprofit Development\n Activities, Circleville, OH, 09/26/2006. Questioned: $238,507;\n Unsupported: $2,350.\n 2006-CH-1018 Saginaw Housing Commission Improperly Used Public Housing\n Funds to Purchase Property, Saginaw, MI, 09/28/2006. Questioned:\n $573,324.\n 2006-CH-1019 Lucas Metropolitan Housing Authority Did Not Effectively Operate its\n Section 8 Housing Choice Voucher Program, Toledo, OH, 09/29/2006.\n Questioned: $211,037; Unsupported: $108,913; Better Use: $1,956,438.\n 2006-CH-1020 Rockford Housing Authority Needs to Improve its Controls over\n Program Housing Assistance and Utility Allowance Payments,\n Rockford, IL, 09/29/2006. Questioned: $663,702; Unsupported: $582,926;\n Better Use: $341,027.\n\n\n150 Audit Reports Issued\n\x0c2006-CH-1021 Housing Authority of the County of Cook Had Weak Controls over its\n Section 8 Housing Choice Voucher Program, Chicago, IL, 09/30/2006.\n Questioned: $178,149; Unsupported: $88,055; Better Use: $3,416,210.\n2006-FW-1008 Brazos Valley Council of Governments Issued Vouchers Larger Than\n its Policy Allowed, Bryan, TX, 05/08/2006. Questioned: $552; Better\n Use: $7,008.\n2006-FW-1009 Dallas County Housing Agency Overhoused Tenants, Dallas, TX,\n 05/09/2006. Questioned: $63,311; Better Use: $298,013.\n2006-FW-1012 Oklahoma Housing Finance Agency Made Minor Mistakes in\n Computing Housing Assistance Payments and Housing Tenants,\n Oklahoma City, OK, 06/29/2006. Questioned: $815; Better Use: $1,214.\n2006-FW-1013 The Housing Authority of the City of Denton Made Subsidy\n Calculation Errors and Overhoused Tenants, Denton, TX, 07/26/2006.\n Questioned: $50,917; Unsupported: $26,104; Better Use: $949,234.\n2006-FW-1015 The Housing Authority of the City of Austin Overhoused Tenants and\n Paid Excessive HAPs in the Section 8 Housing Choice Voucher\n Program, Austin, TX, 09/01/2006. Questioned: $588,130; Better Use:\n $957,276.\n2006-KC-1009 The Omaha Housing Authority Did Not Encumber Resources Without\n HUD Approval, Omaha, NE, 04/24/2006.\n2006-KC-1010 The Omaha Housing Authority Did Not Follow Required Procurement\n Procedures, Omaha, NE, 05/30/2006. Questioned: $5,419; Better Use:\n $970,000.\n2006-KC-1013 The Columbus Housing Authority Improperly Expended and\n Encumbered Its Public Housing Funds, Columbus, NE, 08/30/2006.\n Questioned: $292,225.\n2006-KC-1014 The Columbus Housing Authority Improperly Spent and Encumbered\n Public Housing Funds for Its Non-HUD Development Activities,\n Columbus, NE, 09/27/2006. Questioned: $62,135; Better Use: $111,894.\n2006-LA-1012 The Housing Authority of the City of Los Angeles Did Not Adequately\n Determine and Support Section 8 Tenant Eligibility, Los Angeles, CA,\n 06/20/2006. Questioned: $1,021,222; Unsupported: $1,021,222.\n2006-LA-1017 The Housing Authority of the City of Las Vegas Did Not Comply with\n Contracting and Grant Use Requirements, Las Vegas, NV, 07/21/2006.\n Questioned: $558,068; Unsupported: $394,845.\n2006-NY-1008 The Freeport Housing Authority Has Financial and Management\n Control Weaknesses, Freeport, NY, 06/30/2006. Questioned: $407,782;\n Unsupported: $356,354; Better Use: $241,880.\n2006-NY-1010 Orange City Housing Authority Has Weakness in its Housing Choice\n Voucher Program, Orange, NJ, 09/20/2006. Questioned: $26,231;\n Unsupported: $23,592; Better Use: $1,710,661.\n2006-NY-1011 Orange City Housing Authority Incorrectly Paid the City\xe2\x80\x99s Street\n Lighting Costs and Improperly Wrote-off a Receivable, Orange, NJ,\n 09/20/2006. Questioned: $156,409; Better Use: $20,164.\n2006-NY-1012 The Housing Authority of the City of Passaic Has Allegations of\n Mismanagement That Need to be Addressed, Passaic, NJ, 09/22/2006.\n Questioned: $3,395,901; Unsupported: $1,404,813; Better Use:\n $6,547,788.\n\n\n\nAudit Reports Issued 151\n\x0c 2006-PH-1010 The Housing Authority of the County of Butler Needed to Improve\n Administration of its Section 8 Housing Choice Voucher Program,\n Butler, PA, 04/20/2006. Questioned: $229,961; Unsupported: $229,460;\n Better Use: $77,587.\n 2006-PH-1011 The Hampton Redevelopment and Housing Authority Did Not Always\n Follow HUD Requirements, Hampton, VA, 07/12/2006. Questioned:\n $211,664; Unsupported: $144,707; Better Use: $169,962.\n 2006-PH-1014 The Housing Authority of the City of McKeesport Needed to Improve\n its Low-Rent Housing Maintenance Program, McKeesport, PA,\n 09/25/2006. Questioned: $90,119; Better Use: $1,886,372.\n 2006-SE-1004 The Housing Authority of the City of Bremerton Inaccurately Reported\n its 2005 Section 8 Management Assessment Program Results,\n Bremerton, WA, 06/21/2006.\n 2006-SE-1005 King County Housing Authority Section 8 Program Meets HUD\n Requirements, Tukwila, WA, 09/18/2006.\n\n\n Audit-Related Memoranda\n Housing (1 Report)\n 2006-NY-1801 Section 8 Housing Choice Voucher Program, Rochester Housing\n Authority, Rochester, NY, 05/19/2006.\n\n\n\n\n152 Audit Reports Issued\n\x0cAppendix 2\n T ables\n\x0c Table A\n Audit Repor ts Issued Prior to Star\n Reports Startt of Period with No Management\n Manag\n Decision at September 30, 2006\n * Significant Audit Reports Described in Previous Semiannual Reports\n Report Number Reason for Lack of Issue Date/Target\n & Title Management Decision for Management\n Decision\n\n\n\n\n Nothing to Repor\n Nothing Reportt\n\n\n\n\n154 Tables\n\x0c Table B\n Significant Audit Repor\n Significant ts Described in Pr\n Reports Preevious Semiannual Repor ts in W\n Reports hic\n Whic h FFinal\n hich inal\n Action Had Not Been Completed as of September 30, 2006\nReport Report Title Issue Decision Final\nNumber Date Date Action\n\n1997-NY-1002 Montgomery County 03/14/1997 07/23/1997 12/31/2006\n Community Development\n Program, Fonda, NY\n1997-CH-1010 Major Mortgage Corporation, 09/17/1997 01/06/1998 10/15/2006\n Section 203(K) Rehabilitation\n Home Mortgage Insurance\n Program, Livonia, MI\n2000-KC-0002 Housing Subsidy Payments 09/29/2000 02/21/2001 12/31/2006\n2001-FO-0002 FHA Audit of FY 2000 03/01/2001 07/24/2001 12/21/2006\n Financial Statements\n2001-FO-0003 Audit of HUD FY 2000 03/01/2001 07/18/2001 12/31/2006\n Financial Statements\n2001-CH-1007 Detroit Housing Commission, 05/16/2001 09/13/2001 06/30/2011\n Hope VI Program, Detroit, MI\n2001-FW-1005 Supportive Housing Program, 08/27/2001 12/21/2001 08/03/2007\n Harmony House, Inc.,\n Harrison, AR\n2002-SF-0001 Nonprofit Participation, HUD 11/05/2001 08/30/2002 10/15/2006\n Single-Family Program\n2002-FO-0002 FHA, FY 2001 and 2000 02/22/2002 05/30/2002 12/31/2006\n Financial Statements\n2002-FO-0003 HUD Financial Statements 02/27/2002 08/16/2002 11/15/2006\n FY 2001 and 2000\n2002-BO-1003 Newport, Resident Council, 04/30/2002 09/16/2002 01/15/2008\n Inc., Newport, RI\n2002-KC-0002 Nationwide Survey of HUD\xe2\x80\x99s 07/31/2002 11/22/2002 03/31/2008\n Office of Housing Section 232\n Nursing Home Program\n2002-FW-1003 New Mexico Public Interest 09/30/2002 03/31/2003 Note 1\n Education Fund, Outreach and\n Training Assistance Grant and\n Public Entity Grant,\n Albuquerque, NM\n2002-PH-1005 Philadelphia Regional Alliance 09/30/2002 03/31/2003 03/29/2007\n of HUD Tenants, Outreach and\n Training Assistance Grant and\n Intermediary Technical Assistance\n Grant, Philadelphia, PA\n\n\nTables 155\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2002-PH-1007 Legal Aid Bureau, Inc., 09/30/2002 03/31/2003 Note 1\n Outreach and Training\n Assistance Grant Number\n FFOT98012MD, Baltimore, MD\n 2002-SF-1006 Legal Aid Society of Honolulu, 09/30/2002 03/31/2003 03/29/2007\n HI, Outreach and Training\n Assistance Grant\n 2003-SE-1002 Tenants Union, Outreach and 12/02/2002 03/31/2003 03/29/2007\n Training Assistance Grant and\n Intermediary Training Assistance\n Grant, Seattle, WA\n 2003-AT-1001 Northwestern Regional Housing 01/09/2003 06/02/2003 04/01/2007\n Authority, Public Housing\n Programs, Boone, NC\n 2003-FO-0002 FHA, FY 2002 and 2001 01/21/2003 05/22/2003 12/31/2006\n Financial Statements\n 2003-FW-1001 Low-Rent Program, Housing 02/21/2003 06/20/2003 12/31/2006\n Authority of the City of\n Morgan City, LA\n 2003-CH-1014 Coshocton Metropolitan 03/28/2003 07/28/2003 04/30/2047\n Housing Authority, Public\n Housing Program,\n Coshocton, OH\n 2003-DE-0001 HUD Office of Multifamily 03/31/2003 03/31/2003 Note 1\n Housing Assistance\n Restructuring\xe2\x80\x99s Oversight of\n the Sec 514 Program Activities\n 2003-CH-1017 Housing Continuum, Inc., 06/13/2003 10/10/2003 Note 1\n Homebuyers Assistance\n Program, Geneva, IL\n 2003-NY-1005 Empire State Development 09/30/2003 01/28/2004 03/31/2007\n Corporation, CDBG Disaster\n Assistance Funds, New York, NY\n 2004-BO-1002 Family Living Adult Care 11/04/2003 03/04/2004 04/01/2007\n Center, Biddeford and Saco, ME\n 2004-KC-1001 East Meyer Community 11/24/2003 03/29/2004 06/30/2007\n Association, Kansas City, MO\n 2004-CH-1001 Kankakee County Housing 11/26/2003 03/24/2004 10/31/2006\n Authority, Section 8 Housing\n Program, Kankakee, IL\n\n\n\n\n156 Tables\n\x0cReport Report Title Issue Decision Final\nNumber Date Date Action\n\n2004-DP-0001 FY 2003 Review of Information 12/01/2003 05/28/2004 12/31/2006\n Systems Controls in Support\n of the Financial Statements Audit\n2004-BO-1004 Danbury Housing Authority 12/05/2003 04/05/2004 12/01/2008\n Capital Fund Program,\n Boston, MA\n2004-FO-0003 HUD Financial Statements 12/19/2003 07/20/2004 10/15/2007\n FY 2003 and 2002\n2004-AT-0001 Public Housing Agency 01/13/2004 05/20/2004 04/01/2007\n Development Activities\n2004-AT-1001 Housing Authority of the 01/15/2004 05/14/2004 12/31/2006\n City of Cuthbert, GA,\n2004-AO-0001 Award and Administration of 02/06/2004 06/30/2004 08/01/2007\n Lead-Based Paint Hazard\n Reduction Grants\n2004-DP-0002 Application Control Review of 02/25/2004 07/14/2004 01/30/2008\n the Tenant Rental Assistance\n Certification System\n2004-FW-1003 City of New Orleans Section 03/15/2004 09/07/2004 Note 2\n 108 Loan Program, Jazzland\n Theme Park, New Orleans, LA\n2004-LA-1003 Homewide Lending 05/19/2004 09/01/2004 10/15/2006\n Corporation, Nonsupervised\n Mortgagee, Los Angeles, CA\n2004-PH-1008 Safe Haven Outreach Ministry, 06/03/2004 08/31/2004 Note 2\n Inc., Washington, DC\n2004-FW-1007 City of New Orleans Desire 06/22/2004 09/20/2004 Note 2\n Community Housing\n Corporation, New Orleans, LA\n2004-AT-0002 Effectiveness of the 07/12/2004 12/13/2004 12/31/2006\n Departmental Enforcement\n Center\n2004-AT-1012 Housing Authority of the City 08/02/2004 11/29/2004 12/31/2020\n of Durham, NC\n2004-CH-1803 Somerset Point Nursing Home, 08/09/2004 08/09/2004 12/31/2007\n Multifamily Equity Skimming,\n Shaker Heights, OH\n2004-CH-1008 Cornerstone Mortgage Group, 09/10/2004 01/05/2005 12/31/2006\n Limited Nonsupervised Loan\n Correspondent, Inverness, IL\n\n\n\n\nTables 157\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2004-PH-1012 Mortgage America Bankers, LLC, 09/10/2004 01/06/2005 03/31/2007\n Nonsupervised Loan\n Correspondent, Kensington, MD\n 2004-FW-1009 Mays Property Management, Inc., 09/17/2004 02/23/2005 02/23/2007\n Multifamily Management Agent,\n Little Rock, AR\n 2004-LA-1008 United States Veterans Initiative, 09/27/2004 03/31/2005 04/15/2013\n Inc., Inglewood, CA\n 2004-DE-1004 New Freedom Mortgage 09/29/2004 01/28/2005 Note 2\n Corporation, Single-Family\n Direct Endorsement Mortgagee,\n Salt Lake City, UT\n 2005-DP-0001 FY 2004 Review of Information 10/19/2004 02/16/2005 01/15/2007\n Systems Controls in Support of\n the Financial Statements Audit\n 2005-SE-1001 Tulalip Tribes Housing 10/21/2004 02/02/2005 10/31/2006\n Authority Cannot Account for\n Grant Funds, Marysville, WA\n 2005-CH-1001 Prestige Mortgage Group, Inc., 10/27/2004 10/29/2004 10/29/2006\n Non-Supervised Loan\n Correspondent, Springfield, OH\n 2005-FW-1801 Highland Meadows Apartments, 11/02/2004 02/24/2005 02/28/2007\n Dallas, TX\n 2005-LA-1801 The Carmichael Rehabilitation 11/04/2004 01/27/2005 Note 2\n Center, Carmichael, CA\n 2005-FW-1001 City of New Orleans, Section 108 11/05/2004 03/02/2005 Note 2\n Program, Louisiana ArtWorks,\n New Orleans, LA\n 2005-FO-0002 FHA\xe2\x80\x99s Financial Statements for 11/15/2004 11/15/2004 12/31/2006\n FY 2004 and 2003\n 2005-AT-1004 Housing Authority of the City 11/19/2004 03/15/2005 03/15/2015\n of Durham, NC\n 2005-CH-1003 Royal Oak Township Housing 11/29/2004 03/29/2005 10/31/2006\n Commission, Public Housing\n Program, Ferndale, MI\n 2005-PH-1004 Corrective Action Verification 12/21/2004 04/20/2005 04/30/2007\n Review of the Housing Authority\n of Baltimore, MD, Section 8\n Certificate and Voucher Programs,\n Audit Report No. 2001-PH-1003\n\n\n\n\n158 Tables\n\x0cReport Report Title Issue Decision Final\nNumber Date Date Action\n\n2005-CH-1004 Lakewood Care Center, 12/22/2004 10/07/2005 12/31/2006\n Multifamily Equity Skimming,\n Milwaukee, WI\n2005-CH-1801 RVA Properties Inc., Multifamily 12/22/2004 12/26/2004 06/29/2007\n Equity Skimming, Farmington, MI\n2005-CH-1005 Wood Hills Assisted Living 01/12/2005 10/07/2005 12/31/2006\n Facility, Multifamily Equity\n Skimming, Kalamazoo, MI\n2005-AT-1005 Pan American Financial 01/27/2005 05/17/2005 05/31/2007\n Corporation, Nonsupervised\n Direct Endorsement Lender,\n Guaynabo, PR\n2005-FW-1004 American Property Financial, 01/28/2005 05/27/2005 05/31/2007\n Nonsupervised Loan\n Correspondent, San Antonio, TX\n2005-SE-1003 Oregon Housing and 02/09/2005 05/27/2005 05/01/2008\n Community Services, Salem, OR\n2005-FW-1005 New Orleans African-American 02/25/2005 05/12/2005 Note 2\n Museum Mismanaged its CDBG\n and Did Not Comply with its\n Grant Agreements, New Orleans, LA\n2005-PH-1007 Lehigh County Housing 03/09/2005 05/02/2005 01/30/2017\n Authority Could Not Support\n All Costs and Used HUD Funds\n to Support its Nonfederal Entities,\n Emmaus, PA\n2005-LA-1002 Housing Authority of Maricopa 03/14/2005 07/11/2005 08/31/2007\n County, Mixed Finance\n Development Activities,\n Phoenix, AZ\n2005-AT-1007 Interstate Financial Mortgage 03/15/2005 08/04/2005 01/31/2007\n Group Corporation, Nonsupervised\n Direct Endorsement Lender,\n Miami, FL\n2005-PH-1008 The Housing Authority of the 03/24/2005 07/13/2005 12/31/2006\n City of Pittsburgh Did Not\n Effectively Implement its MTW\n Demonstration Program,\n Pittsburgh, PA\n2005-PH-0001 Criteria Governing Local 03/29/2005 07/27/2005 01/02/2007\n Government Participation in\n HUD\xe2\x80\x99s Single-Family Property\n Disposition Discount Sales\n Program\n\n\nTables 159\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2005-FW-1008 City of New Orleans Did Not 04/08/2005 05/26/2005 Note 2\n Contribute Approximately $3.6\n Million in HOME Funds,\n New Orleans, LA\n 2005-PH-1009 Richmond Redevelopment and 04/08/2005 07/28/2005 10/31/2006\n Housing Authority Did Not\n Always Properly Use HUD Funds,\n Richmond, VA\n 2005-BO-1003 Milford Housing Authority, 04/25/2005 10/07/2005 11/19/2006\n Selected Programs, Milford, CT\n 2005-DE-1004 Aspen Home Loans, American 05/06/2005 08/31/2005 08/31/2007\n Fork, UT\n 2005-DE-0001 HUD\xe2\x80\x99s Control Over FHA Claims 05/12/2005 09/09/2005 01/31/2007\n Payments\n 2005-LA-1003 First Source Financial USA, 05/12/2005 09/08/2005 05/31/2007\n Henderson, WV\n 2005-FW-1010 Broad Street Mortgage Company, 05/26/2005 07/13/2006 07/16/2007\n Subsidiary of Fieldstone Mortgage\n Company, San Antonio, TX\n 2005-NY-1005 The Housing Authority of the 05/26/2005 09/23/2005 12/31/2006\n City of Newark, Bond Financing\n Activities and Section 8 Housing\n Choice Voucher Administrative Fee\n Reserves, Newark, NJ\n 2005-PH-1012 The Lycoming County Housing 06/06/2005 07/12/2005 11/30/2006\n Authority Risked HUD Assets\n for the Benefit of Its Affiliated\n Nonfederal Entity,\n Williamsport, PA\n 2005-LA-1006 Maricopa Home Consortium 07/28/2005 11/22/2005 08/31/2007\n Home Program, Mesa, AZ\n 2005-BO-1004 Housing Choice Voucher and 07/29/2005 11/25/2005 11/25/2006\n Low-Income Public Housing\n Program Deficiencies at the\n Bridgeport Housing Authority\n Resulted in $3.8 Million in\n Questioned Costs, Bridgeport, CT\n 2005-PH-1013 Review of the Commonwealth 07/29/2005 11/22/2005 11/21/2006\n of Pennsylvania\xe2\x80\x99s HOME\n Investment Partnership Program,\n Harrisburg, PA\n\n\n\n\n160 Tables\n\x0cReport Report Title Issue Decision Final\nNumber Date Date Action\n\n2005-PH-1014 Review of the McKeesport 07/29/2005 11/21/2005 11/01/2006\n Housing Authority\xe2\x80\x99s Section 8\n and Public Housing Programs,\n McKeesport, PA\n2005-CH-1012 Savanna Trace Apartments, 08/04/2005 12/28/2005 12/28/2006\n Multifamily Equity Skimming,\n Kalamazoo, MI\n2005-CH-1013 Ivan Woods Senior Apartments, 08/05/2005 12/28/2005 12/28/2006\n Multifamily Equity Skimming,\n Lansing, MI\n2005-LA-1007 KB Home Mortgage Company, 08/12/2005 12/09/2005 12/31/2006\n Las Vegas, NV\n2005-BO-1006 The Hartford Housing Authority 09/06/2005 01/03/2005 01/03/2007\n Improperly Used $3.7 Million\n in Public Housing Operating\n Subsidies for its State and Other\n Federal Programs, Hartford, CT\n2005-LA-0001 Single-Family Preforeclosure 09/13/2005 01/10/2006 01/31/2007\n Sale Program\n2005-AT-1013 Corporacion Para el Fomento 09/15/2005 01/11/2006 11/30/2006\n Economico de la Ciudad Capital\n Did Not Administer its Independent\n Capital Fund in Accordance with\n HUD Requirements, San Juan, PR\n2005-AT-1014 National City Mortgage 09/15/2005 11/14/2005 10/31/2006\n Company Did Not Comply\n with FHA Requirements,\n Miamisburg, OH\n2005-NY-1007 Security Atlantic Mortgage 09/16/2005 01/13/2006 01/31/2007\n Company, Inc. Did Not Always\n Comply with HUD/FHA Loan\n Origination Requirements,\n Edison, NJ\n2005-SE-1007 City Bank, Puyallup, WA 09/16/2005 12/20/2005 12/20/2006\n2005-SE-1008 Idaho Housing and Finance 09/16/2005 03/31/2006 11/01/2006\n Association, Boise, ID\n2005-CH-1017 Flint Housing Commission, 09/23/2005 01/20/2006 01/20/2016\n Section 8 Housing Program,\n Flint, MI\n2005-LA-1010 First Magnus Financial 09/23/2005 01/19/2006 01/19/2007\n Corporation, Las Vegas, NV\n\n\n\n\nTables 161\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2005-BO-1007 Fairfield Financial Mortgage 09/26/2005 01/20/2006 01/19/2007\n Group, Inc., Did Not Always\n Comply with FHA Requirements,\n Danbury, CT\n 2005-LA-1011 KB Home Mortgage Company 09/26/2005 01/23/2006 01/15/2007\n Did Not Follow HUD\n Requirements When Originating\n Insured Loans, Phoenix, AZ\n 2005-FW-1018 The Housing Authority of the 09/27/2005 01/24/2006 01/24/2007\n City of Houston Violated HUD\n Regulations Concerning Section 8\n Housing Choice Voucher Tenants\n and Units, Houston, TX\n 2005-NY-1008 Lower Manhattan Development 09/27/2005 08/22/2006 12/31/2006\n Corporation, CDBG Program\n Disaster Assistance Fund,\n New York, NY\n 2005-NY-1009 Golden First Mortgage 09/28/2005 01/20/2006 01/20/2007\n Corporation, Nonsupervised\n Direct Endorsement Lender,\n Great Neck, NY\n 2005-AT-1015 The Municipality of San Juan 09/29/2005 01/12/2006 12/29/2006\n Housing Authority Did Not\n Properly Administer Its Section 8\n Housing Choice Voucher Program,\n San Juan, PR\n 2005-CH-1020 Housing Authority of the City 09/29/2005 01/25/1006 12/31/2052\n of Gary, Section 8 Housing\n Program, Gary, IN\n 2005-BO-0002 HUD Did Not Conduct a 09/30/2005 12/20/2005 04/01/2007\n Front-End Risk Assessment\n and, Therefore, Fully Implement\n Controls for the Public Housing\n Mortgages and Security Interest\n Program\n 2005-KC-1009 Washington Mutual Bank Did 09/30/2005 01/11/2006 01/11/2007\n Not Follow HUD Regulations\n When Underwriting Six Loans,\n Seattle, WA\n 2006-PH-1001 The Alexandria Redevelopment 10/04/2005 12/01/2005 10/04/2006\n and Housing Authority Improperly\n Used Section 8 Funds to Support\n its Other Programs, Alexandria, VA\n\n\n\n\n162 Tables\n\x0cReport Report Title Issue Decision Final\nNumber Date Date Action\n\n2006-BO-1001 The Division of Grants 10/27/2005 02/02/2006 02/02/2007\n Management, City of Hartford,\n Paid $1,039,296 for Ineligible\n CDBG Activities and Failed to\n Return Income to the Program,\n Hartford, CT\n2006-PH-1002 The Suffolk Redevelopment 10/17/2005 02/08/2006 01/02/2007\n and Housing Authority Did Not\n Always Follow HUD Requirements\n in its Section 8 and Low-Rent\n Programs, Suffolk, VA\n2006-DP-0002 Security Configuration of FHA 10/31/2005 03/30/2006 02/28/2007\n Unix Operating System\n2006-LA-1001 Ryland Mortgage Company Did 10/31/2005 07/13/2006 07/16/2007\n Not Follow HUD Requirements\n in the Origination of Insured\n Loans, Tempe, AZ\n2006-FO-0002 FHA Financial Statements for 11/07/2005 02/15/2006 10/16/2006\n FY 2005 and 2004\n2006-FO-0003 Additional Details to Supplement 11/15/2005 02/02/2006 10/01/2006\n Our Reports on HUD\xe2\x80\x99s FY 2005\n and 2004 Financial Statements\n2006-BO-1002 Review of Worcester Housing 11/29/2005 02/10/2006 11/29/2006\n Authority Identified $1.9 million\n of Its Public Housing Operating\n Funds Used for Non-Program\n Purposes, Worcester, MA\n2006-CH-0001 Real Estate Assessment Center\xe2\x80\x99s 11/30/2005 01/10/2006 12/31/2006\n Physical Condition Assessment\n Was Compromised\n2006-KC-1001 The Columbia Housing Authority 11/30/2005 03/27/2006 11/30/2016\n Is Unnecessarily Paying Housing\n Choice Voucher Program Funds\n for Overhoused Tenants, Columbia, MO\n2006-PH-1003 The Franklin Redevelopment 11/30/2005 03/28/2006 03/31/2007\n and Housing Authority Did Not\n Adequately Administer Its Section\n 8 Program, Franklin, VA\n2006-PH-1004 Homestead Funding Corp. Issued 12/02/2005 03/30/2006 11/30/2006\n and Submitted for Endorsement\n Loans with an Increased Risk of\n Defaults and Claims, Allentown, PA\n\n\n\n\nTables 163\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2006-LA-1003 The Owners of The Avenue 12/07/2005 02/08/2006 02/07/2007\n Misused More Than $32,000 in\n Project Funds, San Francisco, CA\n 2006-PH-0001 HUD Did Not Properly Award 12/07/2005 08/25/2006 10/30/2006\n FY 2004 Healthy Homes and\n Lead Hazard Control Grants\n 2006-KC-1002 First Magnus Financial 12/12/2005 04/06/2006 03/31/2007\n Corporation Did Not Follow\n HUD Regulations When\n Underwriting 23 FHA Loans,\n Overland Park, KS\n 2006-FW-1002 Baytown Housing Authority 12/13/2005 04/07/2006 10/31/2006\n Improperly Advanced,\n Transferred, and Encumbered\n Its Public Housing Funds,\n Baytown, TX\n 2006-DE-1001 First Magnus Financial 12/20/2005 04/06/2006 03/31/2007\n Corporation Did Not Follow\n HUD Requirements in\n Underwriting 31 Insured\n Loans, Denver, CO\n 2006-FW-1003 Palacios Housing Authority Did 12/22/2005 04/03/2006 11/30/2006\n Not Fully Comply with HUD\xe2\x80\x99s\n Standards, Palacios, TX\n 2006-CH-1005 Fairfield Metropolitan Housing 12/30/2005 04/28/2006 12/31/2006\n Authority Used Annual\n Contributions Contract Funds\n for Development Activities Outside\n Its Annual Contributions Contract,\n Lancaster, OH\n 2006-CH-1006 Northstar Community 12/30/2005 05/25/2006 10/30/2006\n Development Corporation\n Inappropriately Used More Than\n $120,000 in Economic Development\n Initiative-Special Purpose Grant\n Funds and HUD\xe2\x80\x99s Interest in More\n Than $180,000 in Grant Funds Was\n Not Secured, Detroit, MI\n 2006-PH-1005 The Housing Authority of the 01/10/2006 04/28/2006 05/01/2007\n County of Butler Used HUD\n Assets Improperly to Develop and\n Support Its Nonfederal Entities,\n Butler, PA\n\n\n\n\n164 Tables\n\x0cReport Report Title Issue Decision Final\nNumber Date Date Action\n\n2006-AT-1002 The Housing Authority of the 01/11/2006 05/11/2006 03/31/2007\n City of Prichard\xe2\x80\x99s Controls over\n the Sale of Affordable Housing\n Units, Use of Sales Proceeds, and\n Expenditure of Low-Income Funds\n Were Inadequate, Prichard, AL\n2006-AT-1003 Certified Home Loans of Florida 01/12/2006 04/03/2006 03/31/2007\n Did Not Always Comply with\n FHA Requirements, Miami, FL\n2006-AT-1004 The Housing Authority of the 01/13/2006 04/25/2006 12/31/2008\n City of Prichard Did Not Ensure\n Section 8 Subsidy Payments Were\n for Eligible Units, Tenants, and\n Landlords, Prichard, AL\n2006-KC-1004 Major Mortgage Improperly 01/20/2006 05/08/2006 03/31/2007\n Submitted Late Requests for\n Endorsement of FHA Loans,\n Cheyenne, WY\n2006-FW-1004 K Hovnanian American 01/26/2006 05/25/2006 01/26/2007\n Mortgage, LLC, Violated\n Underwriting Requirements\n and Did Not Meet All Quality\n Control or Branch Requirements,\n Plano, TX\n2006-SE-1001 Idaho Housing and Finance 01/26/2006 05/23/2006 12/31/2008\n Association Did Not Monitor\n Subsidized Multifamily Projects\n in Accordance with Regulations or\n its Annual Contributions Contract\n with HUD, Boise, ID\n2006-DP-0003 Vulnerability Assessment of 01/31/2006 04/19/2006 06/30/2008\n HUD\xe2\x80\x99s Computer Network\n2006-KC-1005 Matrix Financial Services 01/31/2006 05/11/2006 05/31/2007\n Corporation\xe2\x80\x99s St. Louis Branch\n Did Not Properly Underwrite\n and/or Close 40 FHA Loans,\n St. Louis, MO\n2006-NY-1002 WomenRising, Inc., Did Not 01/31/2006 05/11/2006 04/30/2007\n Always Comply with HUD\xe2\x80\x99s\n Supportive Housing Program,\n Jersey City, NJ\n\n\n\n\nTables 165\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2006-NY-1003 The Housing Authority of the 02/14/2006 08/17/2006 12/31/2008\n City of Newark\xe2\x80\x99s Controls Over\n Bond Financing Activities, Obtaining\n Supporting Documentation, and\n Legal Settlements Require Improvement,\n Newark, NJ\n 2006-PH-1007 The Loan Origination Process 02/15/2006 06/15/2006 02/15/2007\n and Quality Control Plan of\n American Mortgage, Inc., Did\n Not Comply with HUD Regulations\n and Requirements, Cherry Hill, NJ\n 2006-NY-1004 Mount Vernon Urban Renewal 02/16/2006 06/23/2006 06/20/2007\n Agency, Section 8 Housing Choice\n Voucher Program Has Administrative\n and Financial Management\n Weaknesses, Mount Vernon, NY\n 2006-NY-1005 Utica Municipal Housing 02/21/2006 06/22/2006 01/02/2007\n Authority, Operational and\n Administrative Weaknesses Have\n Resulted in Unsupported and\n Ineligible Expenditures, Utica, NY\n 2006-AT-1006 The Municipality of San Juan 02/23/2006 05/15/2006 01/30/2007\n Housing Authority Did Not\n Ensure Section 8 Assisted Units\n Were Decent, Safe, and Sanitary,\n San Juan, PR\n 2006-SE-1002 Northeast Washington Housing 02/27/2006 06/16/2006 10/31/2006\n Solutions Improperly Administered\n Housing Choice Vouchers,\n Spokane, WA\n 2006-LA-1008 Housing Authority of the City 03/01/2006 03/24/2006 10/30/2006\n of Los Angeles Did Not\n Adequately Administer and\n Maintain Its Section 8 Waiting\n List, Los Angeles, CA\n 2006-BO-1004 Mount Saint Francis Health 03/03/2006 05/19/2006 08/08/2007\n Center, Providence, RI\n 2006-LA-1009 Fontana Native American 03/03/2006 03/17/2006 03/17/2007\n Indian Center Did Not\n Adequately Administer Its\n Supportive Housing Program\n Grant, Fontana, CA\n\n\n\n\n166 Tables\n\x0cReport Report Title Issue Decision Final\nNumber Date Date Action\n\n2006-LA-1010 The Owner and Agent of 03/03/2006 06/23/2006 12/31/2006\n Holiday Apartments, LA PRO 30,\n and Two Worlds II Mismanaged\n Project Finances and Operations,\n Los Angeles, CA\n2006-BO-1005 Hartford Housing Authority 03/10/2006 07/07/2006 10/31/2006\n Had Housing Choice Voucher\n Program Deficiencies Resulting in\n More Than $2.6 Million in Costs\n Exceptions, Hartford, CT\n2006-CH-1007 Huntington National Bank, 03/15/2006 09/18/2006 08/10/2008\n Supervised Lender, Generally\n Complied with Requirements\n Regarding Submission of Late\n Requests for Endorsement and\n Underwriting of Loans, Columbus, OH\n2006-KC-1007 American Lending Group Did 03/15/2006 06/08/2006 05/31/2007\n Not Properly Originate 9 Loans\n and Did Not Have Adequate Quality\n Control Procedures, St. Peters, MO\n2006-PH-1008 1st Preference Mortgage 03/23/2006 05/11/2006 04/30/2007\n Corporation, York, PA, and\n Greenbelt, MD, Did Not\n Originate All FHA Loans in\n Accordance with HUD\n Requirements, York, PA\n2006-PH-1009 The Housing Authority of the 03/23/2006 05/24/2006 03/23/2007\n City of Annapolis Did Not\n Adequately Administer Its Section\n 8 Waiting List, Annapolis, MD\n2006-BO-1006 Coventry Health Center, 03/28/2006 05/19/2006 08/31/2008\n Providence, RI\n2006-FW-1006 America\xe2\x80\x99s Mortgage Resource, 03/28/2006 07/14/2006 10/31/2007\n Inc., Branch Manager Formed\n an Identity-of-Interest Entity\n That Provided Gift Funds; and\n Did Not Always Meet HUD Loan\n Origination and Quality Control Plan\n Requirements, Metairie, LA\n2006-AT-1007 The Housing Authority of the 03/30/2006 07/20/2006 07/31/2011\n City of Winston-Salem Used\n More Than $4.9 Million in\n Operating Subsidies for Other\n Programs, Winston-Salem, NC\n\n\n\n\nTables 167\n\x0c Report Report Title Issue Decision Final\n Number Date Date Action\n\n 2006-CH-1008 US Bank NA, Supervised 03/31/2006 09/18/2006 08/14/2008\n Lender, Did Not Always\n Comply with HUD\xe2\x80\x99s\n Requirements Regarding Late\n Requests for Endorsements and\n Underwriting of Loans,\n Minneapolis, MN\n 2006-FW-1007 BSM Financial LP Originated 03/31/2006 08/18/2006 10/01/2007\n Loans on Overvalued Properties\n to Less Than Creditworthy\n Borrowers, Putting Borrowers\n and HUD at Risk, Allen, TX\n\n\n\n\n REPORTS EXCLUDED FROM TABLE: NOTES:\n 35 audits under repayment plans 1 Management did not meet the\n target date. Target date is over\n 32 audits under formal judicial review,\n investigation, or legislative solution 1 year old.\n 2 Management did not meet the\n target date. Target date is\n under 1 year old.\n 3 No Management decision.\n\n\n\n\n168 Tables\n\x0c Table C\n Inspector General Issued Repor\n Reportt with Questioned and Unsuppor ted\n Unsupported\n Costs at September 30, 2006\n (Thousands)\nReport s Number of Questioned Unsupported\n Audit Reports Costs Costs\n\nA1 For which no management 39 46,020 16,682\n decision had been made by the\n commencement of the reporting\n period\nA2 For which litigation, legislation, 10 19,113 9,667\n or investigation was pending at\n the commencement of the\n reporting period\nA3 For which additional costs were - 1,665 9\n added to reports in beginning\n inventory\nA4 For which costs were added to 0 0 0\n noncost reports\nB1 Which were issued during the 63 66,374 34,207\n reporting period\nB2 Which were reopened during the 0 0 0\n reporting period\n\n Subtotals (A + B) 112 133,172 60,565\n\nC For which a management 531 39,450 9,520\n decision was made during the\n reporting period\n (1) Dollar value of disallowed costs\n Due HUD 252 11,752 3,366\n Due program participants 37 22,528 5,180\n (2) Dollar value of costs not 153 5,170 974\n disallowed\nD For which management decision 12 30,312 18,652\n had been made not to determine\n costs until completion of litigation,\n legislation, or investigation\nE For which no management 47 63,410 32,393\n decision had been made by <111>4 <61,724>4 <32,392>4\n the end of the reporting period\n\n1\n 39 audit reports also contain recommendations with funds to be put to better use.\n2\n 9 audit reports also contain recommendations with funds due program participants.\n3\n 15 audit reports also contain recommendations with funds agreed to by management.\n4\n The figures in brackets represent data at the recommendation level as compared to the report level.\n See Explanations of Tables C and D.\n\n\n\n\nTables 169\n\x0c Table D\n Inspector General Issued Repor\n Reportt with Recommendations T hat Funds Be\n That\n Put to Better Use at September 30, 2006\n (Thousands)\n Report s Number of Dollar Value\n Audit Reports\n\n A1 For which no management decision had been 36 170,441\n made by the commencement of the reporting\n period\n A2 For which litigation, legislation, or investigation 7 105,692\n was pending at the commencement of the\n reporting period\n A3 For which additional costs were added to reports - 1,243\n in beginning inventory\n A4 For which costs were added to noncost reports 2 35,550\n B1 Which were issued during the reporting period 48 286,094\n B2 Which were reopened during the reporting period 0 0\n\n Subtotals (A + B) 93 599,020\n\n C For which a management decision was made 49 1 210,642\n during the reporting period\n (1) Dollar value of recommendations that were\n agreed to by management\n Due HUD 222 127,139\n Due program participants 28 45,089\n (2) Dollar value of recommendations that were 163 38,414\n not agreed to by management\n D For which management decision had been made 10 117,298\n not to determine costs until completion of\n litigation, legislation, or investigation\n E For which no management decision had been 34 271,080\n made by the end of the reporting period\n\n 1\n 39 audit reports also contain recommendations with questioned costs.\n 2\n 3 audit reports also contain recommendations with funds due program participants.\n 3\n 14 audit reports also contain recommendations with funds agreed to by management.\n\n\n\n\n170 Tables\n\x0cExplanations of Tables C and D\n The Inspector General Act Amendments of 1988 require Inspectors General and agency\nheads to report cost data on management decisions and final actions on audit reports. The\ncurrent method of reporting at the \xe2\x80\x9creport\xe2\x80\x9d level rather than at the individual audit\n\xe2\x80\x9crecommendation\xe2\x80\x9d level results in misleading reporting of cost data. Under the Act, an\naudit \xe2\x80\x9creport\xe2\x80\x9d does not have a management decision or final action until all questioned\ncost items or other recommendations have a management decision or final action. Under\nthese circumstances, the use of the \xe2\x80\x9creport\xe2\x80\x9d based rather than the \xe2\x80\x9crecommendation\xe2\x80\x9d\nbased method of reporting distorts the actual agency efforts to resolve and complete action\non audit recommendations. For example, certain cost items or recommendations could\nhave a management decision and repayment (final action) in a short period of time. Other\ncost items or nonmonetary recommendation issues in the same audit report may be more\ncomplex, requiring a longer period of time for management\xe2\x80\x99s decision or final action.\nAlthough management may have taken timely action on all but one of many\nrecommendations in an audit report, the current \xe2\x80\x9call or nothing\xe2\x80\x9d reporting format does\nnot take recognition of their efforts.\n\n The closing inventory for items with no management decision on Tables C and D\n(Line E) reflects figures at the report level as well as the recommendation level.\n\n\n\n\nTables 171\n\x0c\x0cAppendix 3\n Inde\n Indexx\n\x0c Index\n Index\n State Page Numbers\n\n Alabama 68, 113, 128\n Arizona 14, 18, 69, 70, 132, 133\n Arkansas 84, 93\n California 14, 17, 20, 21, 26, 29, 30, 54, 57, 58, 59, 60, 61, 62, 63, 64,\n 66, 68, 70, 77, 81, 82, 88, 89, 106, 119, 124, 127, 128, 129,\n 130, 131, 132, 133\n Colorado 14, 17, 19, 24, 124, 127, 128, 130, 131\n Connecticut 52, 54, 71, 72, 78, 125\n District of Columbia 11, 26, 71, 104, 130\n Florida 36, 40, 54, 55, 61, 62, 63, 65, 66, 68, 69, 80, 95, 113, 128,\n 132, 133\n Georgia 22, 26, 42, 53, 67, 124, 128\n Illinois 17, 18, 26, 27, 28, 33, 34, 37, 51, 53, 54, 57, 65, 67, 70, 106,\n 125, 127, 129, 130, 135\n Indiana 56, 91, 94, 106, 131, 132, 133, 135\n Kansas 21, 24, 26, 29, 67, 134\n Kentucky 45\n Louisiana 94, 105, 107, 108, 109, 110, 111\n Maryland 19, 46, 59, 64, 82\n Massachusetts 20, 49, 51, 54, 59, 60, 61, 68, 71, 72, 73, 81, 82, 92, 94, 127,\n 128, 135\n Michigan 14, 27, 29, 35, 40, 41, 50, 58, 59, 126, 131, 135\n Minnesota 53, 62, 68, 70, 124, 126, 132\n Mississippi 107, 111, 112\n Missouri 24, 25, 29, 61, 66, 67, 69, 70, 77, 78, 82, 95, 134\n Montana 14, 53, 66\n Nebraska 41, 43, 44, 66\n Nevada 22, 42, 59, 63, 70, 133\n New Hampshire 63, 65\n New Jersey 13, 19, 21, 22, 23, 33, 36, 44, 51, 66, 71, 92\n New Mexico 52, 54\n New York 13, 23, 24, 25, 29, 39, 50, 57, 59, 72, 81, 82, 83, 84, 93, 94,\n 95, 130, 132,\n North Carolina 16, 28, 52, 53, 62, 72\n Ohio 12, 34, 35, 44, 45, 55, 64, 67, 82, 129\n Oklahoma 70, 127\n Oregon 64, 67\n Pennsylvania 13, 18, 25, 26, 40, 46, 51, 57, 58, 72, 93, 105, 125\n Puerto Rico 36, 51, 86, 87\n Rhode Island 76, 83\n\n174 Index\n\x0cState Page Numbers\n\nSouth Carolina 43, 81, 124\nSouth Dakota 133\nTennessee 25, 33, 62, 65, 94, 132\nTexas 12, 36, 38, 39, 53, 70, 78, 81, 105, 106, 126, 131, 134\nUtah 27, 78, 83,\nVermont 65\nVirgin Islands 53\nVirginia 23, 24, 27, 43, 60, 63, 93, 126,\nWashington 88, 134\nWisconsin 126, 129\n\n\n\n\nIndex 175\n\x0c\x0cHUD OIG Operations\n Telephone Listing\n Listing\n\x0c Office of Audit\n Headquarters Office of Audit, Washington, DC 202-708-0364\n Region 1 Boston, MA 617-994-8380\n Hartford, CT 860-240-4800\n Region2 New York, NY 212-264-4174\n Albany, NY 518-464-4200\n Buffalo, NY 716-551-5755\n Newark, NJ 973-622-7900\n Region 3 Philadelphia, PA 215-656-3401\n Baltimore, MD 410-962-2520\n Pittsburgh, PA 412-644-6372\n Richmond, VA 804-771-2100\n Region 4 Atlanta, GA 404-331-3369\n Miami, FL 305-536-5387\n Greensboro, NC 336-547-4001\n Jacksonville, FL 904-232-1226\n Knoxville, TN 865-545-4369\n San Juan, PR 787-766-5202\n Region 5 Chicago, IL 312-353-7832\n Columbus, OH 614-469-5745\n Detroit, MI 313-226-6190\n Region 6 Fort Worth, TX 817-978-9309\n Houston, TX 713-718-3199\n Oklahoma City, OK 405-609-8606\n San Antonio, TX 210-475-6895\n Regions 7/8 Kansas City, KS 913-551-5870\n St. Louis, MO 314-539-6339\n Denver, CO 303-672-5452\n Regions 9/10 Los Angeles, CA 213-894-8016\n Phoenix, AZ 602-379-7250\n San Francisco, CA 415-489-6400\n Seattle, WA 206-220-5360\n Hurricane Recovery Oversight 504-589-7267\n\n\n\n\n178 HUD OIG Operations Telephone Listing\n\x0cOffice of Investi\n Inv gation\n estig\nHeadquarters Office of Investigation, Washington, DC 202-708-0390\nRegion 1 Boston, MA 617-994-8450\n Hartford, CT 860-240-4800\n Manchester, NH 603-666-7988\nRegion 2 New York, NY 212-264-8062\n Buffalo, NY 716-551-5755\n Newark, NJ 973-776-7347\nRegion 3 Philadelphia, PA 215-656-3410\n Baltimore, MD 410-962-4502\n Pittsburgh, PA 412-644-6598\n Richmond, VA 804-771-2100\nRegion 4 Atlanta, GA 404-331-3359\n Miami, FL 305-536-3087\n Greensboro, NC 336-547-4000\n Nashville, TN 615-736-7000\n San Juan, PR 787-766-5868\n Tampa, FL 813-228-2026\nRegion 5 Chicago, IL 312-353-4196\n Cleveland, OH 216-522-4421\n Columbus, OH 614-469-6677\n Detroit, MI 313-226-6280\n Indianapolis, IN 317-226-5427\n Minneapolis-St. Paul, MN 612-370-3130\nRegion 6 Arlington, TX 817-652-6980\n Houston, TX 713-718-3197\n Little Rock, AR 501-324-5409\n Oklahoma City, OK 405-609-8601\n San Antonio, TX 210-475-6822\nRegion 7/8 Kansas City, KS 913-551-5866\n St. Louis, MO 314-539-6559\n Denver, CO 303-672-5350\n Billings, MT 406-247-4080\n Salt Lake City, UT 801-524-6090\nRegion 9/10 Los Angeles, CA 213-894-0219\n San Francisco, CA 415-489-6683\n Phoenix, AZ 602-379-7251\n Sacramento, CA 916-930-5693\n Las Vegas, NV 702-366-2144\n Seattle, WA 206-220-5380\nHurricane Recovery Oversight 202-708-0390\n\n\n\n\nHUD OIG Operations Telephone Listing 179\n\x0c\x0cReport fraud, waste, and mismanagement\n in HUD programs and operations by:\n\n\n Calling the OIG Hotline: 1-800-347-3735\n\n Faxing the OIG Hotline: 202-708-4829\n\n Sending written information to:\n Department of Housing and Urban Development\n Inspector General Hotline (GFI)\n 451 7th Street, SW\n Washington, DC 20410\n\n Emailing the OIG Hotline: hotline@hudoig.gov\n\n Internet:\n http://www.hud.gov/complaints/fraud_waste.cfm\n\n\n\n All information is confidential,\n and you may remain anonymous.\n\x0cSemiannual Repor\n Reportt to Congress\n Cong\nApril 1, 2006, thr ough September 30, 2006\n through\n\nwww.hud.g\nwww.hud.gov/offices/oi\n .hud.go g\n v/offices/oig\n\n\n\n\nNo. 56 HUD-2006-10-OIG\n\x0c'