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U.S. Resolves False Claims Act Investigation Against Landlord Charging Housing Voucher Tenants Excess Rents

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justice.gov/usao-sdfl/pr/u…

Edward R. Daniel, a/k/a Edward Daniels, Judy Daniel, and the Edward R. Daniel Revocable Living Trust (collectively “Daniel”), a landlord participating in the United States Department of Housing and Urban Development’s (HUD) Housing Choice Voucher/Section 8 (HCV) Program...

has paid the United States $50,000.00 to resolve civil claims. The claims against Daniel, pursued under the False Claims Act,

arise from the landlord’s alleged impermissible charging of parking fees as well as excessive rents to certain HCV Recipient tenants, while accepting federally subsidized Housing Assistance Payments (“HAP”).

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida and Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG), made the announcement.

Through Section 8 of the United States Housing Act of 1937, as amended, HUD distributes federal funds to local public housing agencies to assist eligible low income families in obtaining decent, safe, and sanitary housing in the private rental market.

To receive federally subsidized rents, landlords participating in the HCV Program contractually agree to comply with HUD requirements, to charge only the rent authorized by the local public housing agency...

and to not raise rents or change lease terms without the written approval of the local public housing agency.

“The U.S. Attorney’s Office and our partners take very seriously any abuses of our federal housing programs that may deprive those in need of access to affordable homes,” stated U.S. Attorney Benjamin G. Greenberg.

“We will continue to investigate and prosecute False Claims Act allegations in order to ensure that all landlords comply with federal housing requirements and protect our local tenants and taxpayers.”

“HUD will not tolerate landlords who violate the rules and seek to gain at the expense of the very low income families we serve through the Section 8/HCV Program,” said David Woll, HUD’s Deputy General Counsel for Enforcement.

“Taxpayers have every reason to be outraged when those choosing to do business with the government and receiving federally subsidized rent by entering into HAP Contracts and agreeing to abide by federal regulations,

violate those obligations by overcharging impoverished, elderly and disabled tenants.”

“This settlement demonstrates the United States Department of Housing and Urban Development, Office of Inspector General’s continuing efforts to hold individuals accountable...

whose practices victimize America’s most vulnerable communities. HUD-OIG is committed to collaborating with the Department of Justice to ensure government rules are not manipulated for personal gain,” said Nadine Gurley, Special Agent in Charge, HUD-OIG.

The rents of most of Daniel’s tenants in over 12 apartment buildings in Miami, are subsidized through the HCV Program. Presently, over 120 federally subsidized HCV Tenants reside in Daniel’s residential units in Miami under the administration of...

five HCV Programs in Miami-Dade County, Florida: Miami-Dade County’s Public Housing & Community Development (“PHCD”), Hialeah Housing Authority (“HHA”), the Housing Authority of the City of Miami Beach (“HACMB”), Carrfour Supportive Housing, Inc. and Citrus Health Network, Inc.

The False Claims Act investigation into Daniel began in September 2015, when representatives of PHCD and PHCD’s HCV Program Contractor reported alleged abuses of the HCV Program within certain federally assisted units Daniel owned.

Investigators initially received reports that one or more of Daniel’s HCV subsidized tenants were not occupying the properties and at least one unit was allegedly occupied by an individual other than the authorized tenant,

even though Daniel was receiving HAP payments for those units. As the investigation expanded, investigators received information that Daniel allegedly also received unlawful excessive rent subsidies and in several instances,

double subsidies from different Public Housing Authorities (PHAs) for overlapping periods, for different tenants. During the investigation, the double subsidy payments were recovered from Daniel.

In addition, investigators uncovered evidence that Daniel allegedly charged at least 36 HCV tenants excessive rent and unauthorized parking fees.

Although Daniel did not admit liability, Daniel entered into a Settlement Agreement with the United States wherein the landlord agreed to and has paid the United States $50,000 to settle the allegations that Daniel violated the False Claims Act by...

accepting federally subsidized HAP Payments while charged parking fees and rents in excess of those permitted. Daniel also represented to the United States Attorney’s Office that he reimbursed certain tenants that were charged higher than approved rents.

In addition, through the Settlement Agreement, Daniel agreed to comply with all laws, regulations, rules, directives, ordinances, agreements, certifications and contracts governing the HCV Program.

Moreover, Daniel is prohibited from charging a tenant a parking fee or more than the amount a PHA approves as the Tenant’s appropriate share of rent. The investigation was hindered by Daniel’s poor record-keeping, including failure to maintain certain records.

The Settlement Agreement requires Daniel to maintain tenant records, including receipts, for a specified period of time and to retain a bookkeeper or accountant to maintain a ledger or account for each of the Dwelling Units leased through the assistance of the HCV Program.

Further, in addition to annually providing each federally subsidized Tenant with a Statement of Account of amounts Daniel charged to the HCV Tenant in the prior calendar year and amounts collected from the Tenant,

together with the Security Deposit held, Daniel is required to provide annual notifications to Tenants that they should not pay more than the amount determined by the PHAs.

The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Southern District of Florida, HUD-OIG, and HUD.

Mr. Greenberg also commended the significant assistance provided by Miami-Dade County’s Public Housing and Community Development office, Miami-Dade Police Department,

Hialeah Housing Authority, and the City of Miami Beach Housing Authority. Assistant United States Attorney James A. Weinkle investigated this matter and negotiated the settlement.

A copy of this press release and the Settlement Agreement may be found on the website of the United States Attorney’s Office for the Southern District of Florida at usdoj.gov/usao/fls.

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