U.S. Department of Housing and Urban Development Office of Inspector General

Today we issued our report highlighting HUD’s Top Management Challenges for FY25. In addition to describing the most serious management and performance challenges facing the Department, the report discusses progress HUD made in the past fiscal year including addressing priority open recommendations which, if implemented, will have the largest impact on helping the Department achieve its mission and address its top management challenges.     The Top Management Challenges facing HUD for FY25 identified by HUD OIG are:     1. Promoting Health and Safety in HUD-Assisted Housing  2. Increasing Access to Affordable Housing   3. Mitigating Counterparty Risks   4. Grants Management  5. Enhancing Oversight of Disaster Recovery  6. Managing Fraud Risk and Improper Payments   7. Improving IT Modernization and Cybersecurity   8. Increasing Effectiveness in Procurement Read more: https://lnkd.in/eMaUt4XX

HUD OIG joined the U.S. Attorney for the District of Montana to announce that a former executive director of the Whitefish Housing Authority admitted to embezzling at least $100K from the organization from approximately May 2023 to January 2024. The defendant stole housing authority money by diverting and inflating payroll, fraudulently paying personal expenses with the Whitefish Housing Authority credit card and creating and paying fraudulent invoices to businesses over which he had control. He faces a maximum of 10 years in prison, a $250K fine and 3 years of supervised release. 👉  Read more: https://lnkd.in/epEvTqRN

Bob Dean Jr. and Affiliated Corporate Entities Agree to $8.2M Consent Judgment to Resolve Allegations of Financial Misconduct Stemming from Evacuation of Nursing Homes During Hurricane Ida A former business owner and his companies have agreed to an $8.2 million consent judgment to resolve allegations that they violated the National Housing Act of 1934 (NHA), by misappropriating and misusing the assets and income of four nursing homes in Louisiana before and after Hurricane Ida’s landfall in August 2021. It is alleged that in the five years leading up to Hurricane Ida, the defendant funneled money that should have been used to prepare an evacuation site for nursing home residents to his personal bank accounts, leaving his nursing homes — and, more importantly, the nursing homes’ residents — unprepared for a hurricane. As a result, when Hurricane Ida made landfall in August 2021, the residents of his nursing homes had to ride out the storm in an overcrowded and ill-prepared industrial warehouse that he owned through a corporate entity. 👉 Read more: https://lnkd.in/e5BgNx8W

Newark Businessman Admits Bribing Former Newark Deputy Mayor and Director of Newark Department of Economic and Housing Development HUD OIG joined the U.S. Attorney for the District of New Jersey to announce the plea of a Newark business owner who admitted to bribing a former city official in exchange for assistance with the acquisition and redevelopment of city-owned property. 👉 Read more: https://lnkd.in/eEyb_5aK

HUD OIG joined the United States Attorney for the Northern District of California to announce the indictment of a former employee of a global security and aerospace company, for mail fraud and theft of government property. The indictment alleges that beginning in or around August 2016, the defendant requested differential pay from Company 1 on the purported basis that he was deploying with the U.S. military in support of Operation Inherent Resolve, a U.S. military command established in or about October 2014. In support of his request, he allegedly sent false military orders and a false military leave and earnings statement. Based on these representations, Company 1 awarded the defendant differential pay. The defendant allegedly continued to receive differential pay over the next several years on the purported basis that his deployment had been extended. In a separate indictment, the defendant was charged with a single count of theft of government property. According to the indictment, the defendant wrongfully obtained approximately $35,093 in housing assistance payments to which he was not entitled. If convicted, he faces a maximum sentence of 10 years in prison and a fine of $250,000. This is a joint HUD OIG investigation with the DoD OIG, DCIS. 👉 Read more: https://lnkd.in/eY5H-kx5

ICYMI: James B. Nutter & Company to pay $2.4M for allegedly causing false claims for federal mortgage insurance. A former mortgage lender located in Kansas City, Missouri, has agreed to pay $2.4 million to resolve allegations that it violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 by knowingly underwriting Home Equity Conversion Mortgages insured by HUD’s Federal Housing Administration that did not meet program eligibility requirements. The settlement resolves the United States’ allegations in a lawsuit filed in 2020 that the mortgage lender knowingly violated FHA underwriting requirements when it allowed inexperienced temporary staff to underwrite FHA-insured loans and submitted loans for FHA insurance with underwriter signatures that were falsified and/or affixed before all the documentation the underwriter should have reviewed was complete. 👉 Read more: https://lnkd.in/ehNNcPga

HUD OIG joined the Acting United States Attorney for the Northern District of Illinois to announce the conviction of a Chicago loan originator for his role in a scheme to fraudulently obtain approximately $2.6 million in federally guaranteed mortgage loans. The defendant recruited buyers at real estate investment seminars held in Chicago-area churches and hotels and caused them to make false representations to lenders about the source of their down payments and their intention to occupy the properties as their primary residences, among other things. He then provided or caused others to provide funds to the buyers for use as down payments, knowing that the lenders would be falsely led to believe that the money belonged to the buyers. After the issuance of the government-insured mortgage loans, the defendant would make payments to the buyers – describing them as “grants” – and then pocketed payments from the sellers without notifying the lenders. 👉 Read more: https://lnkd.in/e8KzF-_4

A California real estate executive was sentenced to one year and one day in prison, followed by two years of supervised release, and ordered to pay a fine of $200,000 for engaging in an extensive multi-year conspiracy to falsify financial statements. Between 2015 and 2019, the defendant and his co-conspirators caused false financial documents, including historical operating statements that deleted or reduced actual expenses, to be submitted to mortgage lending businesses for underperforming properties, to create the appearance that the properties were more profitable to refinance or avoid contractual provisions by the lenders. The defendant, who was a licensed attorney, acknowledged that he personally falsified historical operating statements during the conspiracy and directed other members of the conspiracy to assist with the creation and submission of falsified financial statements to mortgage lending businesses.   This was a joint HUD OIG case with the FHFA OIG and the FBI.   👉 Read more: https://lnkd.in/eK7fq_Hs

As we celebrate Hispanic Heritage Month, HUD OIG proudly recognizes the contributions and influences of Hispanic Americans to the history, culture, and achievements of the United States.

HUD OIG appreciates the U.S. Attorney's Office for the Eastern District of Virginia cohosting a community outreach event in Richmond, VA focused on combatting sexual misconduct in housing and addressing environmental hazards, such as lead-based paint. Thanks to all who attended!