OIG News

Men Charged with Embezzling Money from Indian Housing Grants. The Las Vegas Sun (5/28, Manning, 41K) reports that two men "have been indicted by a federal grand jury in Las Vegas on conspiracy, bribery and embezzlement charges relating to an Indian housing grant program." U.S. Attorney Greg Brower of Nevada said that both William Aubrey of Mesquite, NV, and Chester Carl of Gallup, N.M., "are charged with conspiracy to commit bribery and bribery relating to a US Housing and Urban Development grant program, which funded development of low-income housing on Navajo Nation Indian lands in Arizona and New Mexico. The "case is being investigated by the Office of Inspector General for US Housing and Urban Development and prosecuted by Assistant US Attorneys Jeffrey T. Tao and Kathleen Bliss."

Troy Settles Financial Dispute with HUD. The Troy (NY) Record (5/25, Caprood) reports that the City of Troy has "settled its financial issues" with HUD which "claimed earlier this year that federal funds had been used for projects which were later deemed ineligible." The city "was required to refund a total of $564,066 to its Community Development Block Grant account by the middle of April" after a review by HUD's inspector general "deemed a number of expenses the municipality had applied for were not eligible for federal funding because of administrative or procedural deficiencies." The money "was transferred from several of the city's Capital Fund accounts earlier this year so that the money would be available for other eligible CDBG projects." But a March letter to Mayor Harry Tutunjian from Robert Scofield, director of HUD's Albany Office, "cleared the city of several of the department's initial findings regarding a lack of documentation or failure to follow policies after the city filed an appeal with the office in January explaining that several of the projects cited had been in process during the time of their review." According to the paper, the projects "deemed ineligible had been initially approved by the HUD's Buffalo office when the city had submitted its plans, but were later disallowed when the inspector general conducted his review."

Lawmakers Advocate "Aggressive Help for Homeowners". CongressDaily (3/20) reports the House Financial Services Housing Subcommittee on Thursday "urged federal housing officials to aggressively market their plans to help homeowners struggling to make mortgage payments. But, it warned that the government must move forcefully against fly-by-night companies touting mortgage help for a hefty fee." House Financial Services Housing Subcommittee Chairwoman Maxine Waters (D-CA) said, "On TV, they sound like they are the government. ... In this era when we are trying to reach people to get their loans modified, some people are going to think this is part of the plan. Whose responsibility is it?" In response, Vance Morris, director for HUD's Single Family Asset Management Office, said it "is 'a shared responsibility,'" and that he "turns such issues over to HUD's inspector general or the US Attorney's office." Mr. Morris and Patrick Lawler, chief economist for the Federal Housing Finance Agency, "touted toll-free phone numbers and a new website, www.makinghomeaffordable.gov, which are designed to help struggling homeowners before they go into foreclosure."

HUD Audit Calls for La. to Repay Grant Money. The AP (5/8) reports HUD auditors are "recommending" that Louisiana "repay up to $735,087 in grant money awarded to several homeowners after hurricanes Katrina and Rita." According to a HUD report, the agency's Office of Inspector General "identified several properties receiving two or more Road Home grants that exceeded the overall grant limit of $150,000. The auditors said the state's contractor failed to set up an adequate system for identifying multiple payments for a single damaged property." The AP adds that in response to the HUD audit, the state "said errors were made in processing some of the eight grants cited by HUD's report. But the state disagreed that its Road Home contractor, ICF Emergency Management Services, didn't have adequate controls in place to identify multiple payments."

Feds Relent On HUD Repayment From Newburgh. The Middletown (NY) Times Herald-Record (4/22, Murphy) reports HUD said that it "won't hammer Newburgh for payments the city made to cover for a deadbeat waterfront developer." In November 2008, inspectors for HUD's Office of the Inspector General "released an audit that said the city squandered $2 million in grants that were supposed to help the poor. The inspectors recommended harsh remedies, such as repaying the money within 90 days from nonfederal sources." But "in its ultimate decision," HUD "chose leniency" and "rejected inspectors' claims a waterfront marina and fallow industrial park were ineligible for the grant program." The city, however, "will have to provide further documentation and contribute any winnings from a pending lawsuit against Glendening to CDBG programs.