HUD Director Goes on $336,000 Shopping Spree with Low-Income Housing Funds
AUGUST 18, 2017
A high-ranking public housing official charged with providing government-subsidized homes to the poor stole hundreds of thousands of dollars from the agency and used it to buy furniture, alcohol, clothes, makeup and other personal items. The crooked public official scammed the government for years undetected which may seem unbelievable though not when it comes to the agency she worked for, a bastion of corruption known as Housing and Urban Development (HUD).
This is an agency that’s been embroiled in a multitude of serious scandals—under both Democrat and Republican administrations—over the years. One veteran employee at a state branch stealing a few hundred thousand bucks to go on a marathon shopping spree is no biggie. Problems go 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 ousted 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.
Fraud and corruption has also been pervasive among HUD employees and field directors. A few years ago, an employee got 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 federal audit determined that the agency knew about the spending spree but didn’t bother taking action, reprimanding the employee or reporting 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 fleeced taxpayers out 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.
Years later, an executive director at one of those branches in Michigan gets busted for embezzling $336,000. Her name is Lorena Loren and for years she served as the executive director of the St. Clair Housing Commission, which administers a local Section 8 housing program in southeast Michigan. Section 8 is the federal government’s major program for assisting very low-income families, the elderly and the disabled to afford decent, safe and sanitary housing in the private market. The program is administered locally by Public Housing Agencies (PHA) like the St. Clair Housing Commission so the cash comes from the feds though there appears to be no oversight. The idea is 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, buying items for herself and relatives, according to a federal charging document obtained by a Detroit, Michigan newspaper. She racked up around $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. The disgraced housing director 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.
Clearly, this is part of a much broader epidemic at HUD. A Michigan-area newspaper editorial blasts the agency for failing to protect taxpayer dollars and low-income families that need help. The piece cites 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. “It should be more difficult for housing commission directors to write checks to themselves,” the editorial states. “And the U.S. Department of Housing and Urban Development should be keeping closer watch over its Section 8 voucher program.” Hopefully President Trump’s new HUD secretary, Ben Carson, will clean some house at the fraud-infested agency. We don’t’ need a newspaper editorial to tell us that “HUD clearly has a gap in its fiduciary responsibility.”
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