Costly fraud uncovered in Chattanooga public housing

Costly fraud uncovered in Chattanooga public housing

March 10th, 2012 in Opinion Free Press

The Chattanooga Housing Authority recently put a stop to applicants using brief employment to get priority for public housing and then promptly quitting their jobs once they were in the housing.

But now comes word that more than 900 tenants in local public housing or government-subsidized private housing have been involved in some form of fraud during the past eight years -- in some cases resulting in applicants who played by the rules being denied housing at least for a time.

The fraud was as extensive as it was costly: It totaled nearly $2 million in lost rental and utility payments over that time period. And it took place even as thousands of other people were awaiting public housing or Section 8 rental vouchers for private housing.

More than 600 of the cases have resulted in residents having the option to set up a repayment plan. Otherwise, they are evicted. There have been criminal prosecutions in local or federal courts in an additional 312 cases.

The widespread fraud came to light while the Chattanooga Times Free Press was looking into the recently resolved problem of people who briefly got employment but then left their jobs shortly after using that employment status to get priority for public housing. Now, to get preference for housing ahead of others, individuals have to show that they have been working for at least one year.

But these latest revelations of fraud in taxpayer-subsidized housing are alarming, and the ways the fraud was carried out are outrageous.

In one case, a landlord pretended to be a tenant and a friend pretended to be the landlord. The friend then cashed the Section 8 checks and gave the money to the landlord. That scam wasn't discovered and referred for federal prosecution until the landlord and friend got into an argument and one reported the other.

In another case, a tenant actually had two public housing units because a sibling had forged the tenant's name on a lease. This apparently did not involve fraud on the tenant's part but on the part of the sibling, whose criminal record barred him from public housing. The sibling is no longer in public housing.

We do not know all the details of that case, but it seems odd that a person could have gotten government-subsidized housing without clear, readily verifiable documentation of his identity -- which presumably would have revealed his criminal history.

Fraud under any circumstances is troubling. But when it involves tax dollars -- which the public is obligated by law to pay -- it is even more disgusting.

So the question to be asked now is whether the housing authority has taken or is taking a top-to-bottom look at its procedures for granting public housing or Section 8 vouchers, as well as its procedures for ongoing verification that the people in taxpayer-funded housing are eligible to be there.

There may be no way to prevent fraud altogether, but that should be the goal -- and there should be energetic, determined efforts to achieve it.