The owner of a multifamily Section 8 housing facility in Port Arthur, Texas “assisted at least 82 tenants who were either ineligible for assistance because they did not exist or the tenant eligibility and the unit physical condition standards could not be supported,” a Housing and Urban Development audit found.
According to the audit, the owner and former management agent lacked oversight of the staff who ran the Villa Main apartment complex. These employees falsified tenant eligibility, did not properly verify tenant income and failed to inspect the units as required by HUD.
As a result, HUD paid the owner $534,741 in subsidies for ineligible “ghost” tenants.
From the audit, which shows how the deceitful operation functioned:
After the Section 8 tenant moved out of unit 150 in 2011, Villa Main continued to use her personal identification information to collect HUD housing subsidies for that unit through April 2016.
A different tenant confirmed that she lived in unit 150 and paid full rent by cash or money orders. However, the tenant file showed that this tenant lived in unit 108 and not unit 150 as stated by the tenant.
Our review of utility records confirmed that utilities for unit 150 were in this tenant’s name from December 2011 through April 2016. In this case, the onsite managers used the tenant’s personal identification information to collect the HUD subsidy for unit 108, while the tenant paid full rent for unit 150, which HUD also subsidized the entire time the tenant lived there.
The tenant said she did not know she had applied for Section 8 and that she currently owned a house and business and knew she did not qualify for the program. Further, the tenant confirmed that signatures on 2014 and 2015 tenant recertifications for unit 108 were not her signature.
Also, the owner billed HUD for at least 43 tenants whose eligibility it could not support, according to the audit. The auditor’s review of 34 tenant files showed that all of the files contained deficiencies. Two more tenants confirmed with auditors that their income was falsified.
Rosalba Sanchez, the assistant manager at Villa Main apartments, was charged with theft of public money, according to court documents. She pleaded guilty last year and was sentenced to 20 months in prison.
Trent Seibert can be reached at [email protected] or atr 832-258-6119.