Rural Housing Contact: LaJaycee Brown (202) 720-9741
lajaycee.brown@usda.gov
OIG Contact: Dianne Smith (202) 720-6915
diannes@oig.usda.gov
USDA LAUNCHES EFFORT TO ELIMINATE FRAUD IN HOUSING PROGRAMS
WASHINGTON, April 30, 1999-- U.S. Department of Agriculture officials announced today the results of a joint initiative of USDA Rural Development and Office of Inspector General to stamp out fraud in a program that helps poor people in rural areas obtain housing. A recently released report prepared by Rural Development and OIG identifies ways to eliminate waste, fraud and abuse in the rural rental housing program.
This initiative was spurred in part by Congress' recent enactment of legislation expanding criminal penalties for participants in the Rural Housing Service program who engage in "equity skimming." Equity skimming is the misuse of project assets or income. USDA's rural rental housing, with over 450,000 rental units in 18,000 complexes nationwide, meets a critical need in rural America by providing affordable homes for the elderly and for families with average incomes of $7,300.
"This effort will help USDA eliminate fraud and abuse from one of our most important rural housing programs -- a program which ensures that many of our most vulnerable citizens are housed in decent and safe homes," Rural Development Under Secretary Jill Long Thompson said.
The OIG and Rural Development team developed a forensic profile of factors that indicate when program rules are likely being abused. OIG and Rural Development's Rural Housing Service reviewed the rental program in 13 states to test the forensic profile and confirm the suspected presence of crime affecting this program. By using this profile and inspecting hundreds of apartment complexes, the team narrowed its focus to 32 management agents and owners considered to be "high risk." Of those 32, 18 misused funds totaling $4.2 million. Criminal investigations are ongoing against 9 of the 18, as well as an additional management agent.
"This joint effort demonstrates the resolve of OIG and Rural Development to eliminate abuses in the program," Inspector General Roger Viadero said. "I was impressed by the commitment of both the RHS national office and field staff to eliminate these problems. In putting aside some of our traditional jurisdictional boundaries, we have improved our ability to protect the tenants and the taxpayer's investment in this program."
Long Thompson noted that USDA now has a "road map" to guide similar efforts in the future. "We will not tolerate any misuse of taxpayer dollars," Thompson said. "We will continue to join forces with the Inspector General in a variety of ways to build on our successes."
Long Thompson and Viadero plan to pursue joint training for program staff and to create additional task forces to determine how to effectively utilize the forensic profile and enforcement actions to detect and eliminate fraud and abuse in this vital rural housing program.
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