Joint investigation nets federal employees defrauding housing programs
WASHINGTON – Federal employees who fail to report their income to qualify for housing assistance they would not otherwise be eligible for stand to lose their jobs, pay steep fines and face possible criminal penalties. That’s the stern warning issued today by the U.S. Department of Housing and Urban Development as it reported that an ongoing joint investigation has so far produced 34 indictments, 13 convictions, and recovered $541,813.
In April of 2006, HUD and investigators from the Department’s Office of Inspector General launched “Operation FedRent,” an anti-fraud effort designed to expose and prosecute federal government employees who misrepresent their incomes to obtain rental subsidies, effectively denying housing assistance to eligible families.
“Operation FedRent is sending a very clear message to federal employees who are defrauding our programs – if you try to game the system, you’ll be found,” said HUD Secretary Alphonso Jackson. “This joint investigation protects the integrity of our housing assistance programs and makes certain every available dollar reaches those families who have a true need.”
HUD Inspector General Kenneth Donohue said, “This investigation and its positive outcome were the result of a national collaborative effort representing the involvement of many agencies. I want to thank those that assisted in this endeavor specifically, the Veterans Administration OIG, the Treasury Inspector General for Tax Administration, and the Department of Homeland Security OIG who was particularly effective regarding Federal Emergency Management Administration and Transportation Safety Administration issues.”
Federal employees who are receiving housing assistance must meet household income limits in order to be eligible. In some areas of the country, waiting lists for subsidized housing are long and a low-income family might wait months or even years to receive such assistance. In one case, Marjorie Chatman, an employee of the Social Security Administration (SSA), plead guilty in U.S. District Court for theft of government funds. HUD’s OIG and the SSA’s OIG found that Chatman failed to report income to the Richmond, California Housing Authority and received $64,000 of housing assistance she was not entitled to receive.
In another case, Shellette Jackson, a State Department employee, pled guilty in U.S. District Court to false claims and fraudulently obtaining rental assistance from the Washington, D.C. Housing Authority (DCHA). A joint investigation by the HUD and State Department OIG discovered Jackson failed to report income to the DCHA and D.C. Department of Human Services and obtained $22,705 of housing assistance and $27,679 of Medicaid, food stamps and other benefits she was not qualified to receive.
HUD and its OIG use computer-matching techniques to determine whether federal employees are under-reporting their income in order to qualify for rental assistance and other public benefits Once identified, these tenants will be required to repay any excess assistance and the appropriate administrative or legal action will be taken.
HUD and the OIG compare income data with employment information maintained by other federal agencies on federal employees and retirees. After a thorough evaluation and comparison of the employment and housing data, investigative leads are developed and referred to the HUD Inspector General’s Regional Field Offices for further investigation. In many instances HUD OIG works with other Inspectors General investigating allegations. Investigations that uncover different criminal violations are referred to the appropriate federal or state prosecutors.
HUD currently spends more than $28 billion a year to support a number of rental assistance programs that serve approximately 4.8 million families. In 2000, HUD estimated that tenant under-reporting of income cost taxpayers $978 million. HUD’s efforts to tighten controls in its rental assistance programs are working. The Department has dramatically cut rental miscalculations by half and tenant under-reporting of income by 61 percent. Initiatives like “Operation FedRent” help build on HUD’s operational improvements to cut waste, fraud and abuse in its rental assistance programs.
HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
Operation FedRent Convictions as of 12/14/07
Darlene Thomas, a Baltimore City Housing Authority (BCHA) HCVP participant and employee of the Department of Veterans Affairs (VA), pled guilty in Maryland State Court to theft. The defendant failed to report income on BCHA certifications. Thomas has been removed from HCVP participation.
Crystal Humphries, a Delaware County Housing Authority (DCHA) HCVP participant and employee of the Internal Revenue Service (IRS), was sentenced in Commonwealth of Pennsylvania District Court to Supervised Release of 36 months and restitution of $7,745. Humphries failed to report her income on annual DCHA certifications and obtained $7,745 of DCHA housing assistance she was not entitled to receive. Humphries has been removed from participation.
Shellette Jackson, a former Washington D.C. Housing Authority (DCHA) Section 8 tenant and an employee of the U.S. Department of State was sentenced in U.S. District Court to 100 hours of Community Service, Supervised Release of 36 months and restitution of $50,384. Jackson failed to report income on DCHA and DC Department of Human Services certifications and obtained $22,705 of DCHA housing assistance and $27,679 of Medicaid, food stamps and other benefits she was not entitled to receive. HUD OIG and U.S. Department of State OIG are conducting this investigation. In addition, Jackson resigned State Department during the investigation.
LaGloria Timmons, a former Miami-Dade Housing Agency (MDHA) and Tampa Housing Authority (THA) Section 8 tenant, was sentenced in U.S. District Court to Supervised Release of 60 months and restitution of $18,000. From 2001 to March 2006, Timmons failed to report Social Security Administration (SSA) income on MDHA/THA certifications and obtained $19,855 of MDHA/THA housing assistance she was not entitled to receive.
Shavonne Coleman-Modest and Patricia Knight, former Michigan State Housing Development Authority (MSHDA) Section 8 tenants and employees of the IRS, entered into pretrial diversion agreements filed in U.S. District Court, agreeing to perform community service and pay HUD a total of $53,036 in restitution. Both Coleman-Modest and Knight failed to report income on MSHDA certifications and obtained a total of $53,036 of MSHDA housing assistance they were not entitled to receive. HUD OIG and Treasury Inspector General for Tax Administration conducted this investigation.
Patricia Frazier, a Cleveland Housing Authority (CHA) Section 8 tenant and VA employee, was sentenced in U.S. District Court to pay restitution of $4,466. Frasier underreported her income to obtain $4,466 in housing assistance she was not entitled to receive.
Janet Buckner, an employee of the U.S. Department of Agriculture and former St. Louis County Housing Authority (SLCHA) Section 8 tenant, was sentenced to 5 months probation and ordered to pay SLCHA and others $33,775 restitution for her earlier guilty plea to false statements to HUD, SSA and USDA. Buckner failed to report income and obtained $16,534 of SLCHA housing assistance and more than $109,000 of USDA and SSA benefits she was not entitled to receive.
Connie Wooten, a former Housing Authority of Kansas City, MO (HAKC), pled guilty in Jackson County Circuit Court to stealing by deceit; Wooten was sentenced to 40 hours community service and ordered to pay HAKC $5,000 restitution. Wooten, a USPS and IRS employee, failed to report income to HAKC and obtained $16,294 of HAKC housing assistance she was not entitled to receive.
Chantelle Maddix, a Housing Authority of Kansas City (HAKC) Section 8 tenant and IRS employee, was sentenced in Jackson County District Court to 20 hours of Community Service and Supervised Release of 24 months.
Kim Carson, a former Santa Monica Housing Authority (SMHA) Shelter Plus Care Program recipient and an auditor with the Department of Defense, Defense Contract Audit Agency, was sentenced in U.S. District Court to 60 months supervised release, 250 hours of community service and ordered to pay HUD $44,843 restitution for her earlier guilty plea to theft of public money. From March 2002 to January 2005, Carson underreported her income by submitting altered employer earning statements to SMHA, and obtained $26,284 in SMHA housing assistance and $18,559 in SMHA Family Self-Sufficiency Program assistance she was not entitled to receive. Carson was removed from participation.
Majorie Chatman, a SSA employee and former Richmond (California) Housing Authority (RHA) Section 8 tenant, pled guilty in U.S. District Court to theft of government funds. From April 1997 through November 2006, Chatman failed to report income on RHA certifications and obtained $64,000 of RHA housing assistance she was not entitled to receive. HUD OIG and SSA OIG conducted this investigation. Chatman was removed from participation.
Charlotte Washington, a former Alexandria Housing Authority (AHA) HCVP recipient was sentenced in U.S. District Court to 100 hours of Community Service, Supervised Release of 36 months and restitution totaling $7,952. This case was referred by the AHA in response to HUD OIG’s request for information on the OPM data match; however, it was determined that Washington was not a Federal employee.