The agency for Housing and Urban Development (HUD) has an abysmal history when it comes to fraud, and it looks like nothing has changed with the latest public corruption case heard in federal court involving Michigan’s former executive director of the St. Clair Housing Commission, who was charged with embezzling more than $300,000 in low-income housing funds and spending the money on herself and family.
After years of scheming, authorities say Lorena Loren was finally caught stealing from the poor to buy booze, makeup, clothes and homes for her relatives.
The agency has been involved in a multitude of serious scandals—under both Democrat and Republican administrations—over the years, so one veteran employee at a state branch stealing a few hundred thousand bucks to go on a marathon shopping spree may seem like no big deal. This kind of fraud goes back to the Ronald Reagan administration, when an influence-peddling scandal led to the conviction of 16 people, including top aides to then HUD Secretary Samuel Pierce.
Bill Clinton’s housing secretary, Henry Cisneros, pleaded guilty to lying to the FBI about payments to his former mistress. George W. Bush’s HUD secretary, Alphonso Jackson, was cut loose from his post after the feds launched an investigation into his plots to enrich himself and his friends by giving them lucrative government contracts. Barack Obama’s second HUD secretary, Julian Castro, misspent the agency’s federal funds as mayor of San Antonio.
According to a report by Judicial Watch, a disturbing number of HUD employees and field directors have been revealed to be common criminals. For instance, an employee was busted for racking up nearly $12,000 on his agency credit card by charging personal items such as groceries, lodging, television cable, transportation and even prescription medications a few years ago. A federal audit determined that the agency knew about the spending spree but did not even reprimand the employee or report the wrongdoing.
HUD’s inspector general has also testified before Congress about the severe mismanagement at offshoots functioning independently—yet federally funded—in states across the country that have ripped off taxpayers to the tune of hundreds of millions of dollars. He testified that his office discovered more than $200 million in questionable spending at local public housing agencies (PHAs) since 2012.
PHAs are created by states, operate at the city or county level and administer the federal program known as Section 8 to provide low-income people with affordable housing. Many of these local public housing agencies are run by people with “troubled backgrounds” that somehow manage to remain in high-ranking positions at the agencies, the watchdog told lawmakers back in 2014.
Loren was an executive director at one of those branches in Michigan. Her office was administered locally by Public Housing Agencies (PHA), which means that the cash came from the feds, though there appeared to be no oversight. The idea was to subsidize housing costs, via vouchers, so the poor can live in privately owned, single-family homes, townhouses or apartments they otherwise couldn’t afford.
For eight years, Loren used government credit cards as her personal piggy bank, racking up roughly $135,000 in purchases from online retailer Amazon, $14,364 at big-box store Sam’s Club and $16,460 at various Walmart stores. The purchases included food, medicine, appliances, furniture, clothing and booze. She also used $24,600 in agency funds to pay for her son’s rental unit, falsified documents—including lease agreements to use housing voucher cash to rent a home for her son—and deposited federal rental subsidy funds into family members’ bank accounts. Loren has been charged with conspiracy to commit federal program fraud and faces up to five years in prison, according to Judicial Watch.
Recalling other recent cases in which public employees stole from HUD’s Section 8 program, including a 52-person ring in Ohio and schemes in Texas, Louisiana, Arkansas, Colorado and Massachusetts, a Michigan-area newspaper editorial slammed the agency for failing to protect taxpayer dollars and low-income families that need help.
“It should be more difficult for housing commission directors to write checks to themselves,” the editorial said. “And the U.S. Department of Housing and Urban Development should be keeping closer watch over its Section 8 voucher program.”
President Trump’s new HUD secretary, Ben Carson, will hopefully put an end to such fraud being perpetrated throughout the agency.
According to The Daily Caller News Foundation’s Investigative Group (DCNF) in May, at least 14 reports were withheld by a government watchdog organization that revealed numerous problems allowing fraud and waste at the Department of Housing and Urban Development.
“The reports concern issues plaguing the Department of Housing and Urban Development (HUD), including felons illegally living in federally-funded homes, tax fraud and millions of dollars sitting in unused bank accounts for years. The department’s 2017 budget is $48.9 billion and it has 8,375 employees.”
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