Housing Management Resources paid the federal government $2.5 million to resolve a civil False Claims Act matter involving Section 8 housing assistance at two properties, the Justice Department announced November 6. The company admitted responsibility for personnel changing tenant-file documents before government audits in 2015.
Section 8 authorizes the Department of Housing and Urban Development to make housing-assistance payments to owners of eligible housing on behalf of low-income tenants. Owners and management agents must maintain documentation supporting tenant eligibility and the amount of assistance claimed, according to the department.
What the company admitted
The settlement concerns Albert Carriere Apartments, also known as Champlain Family Housing, in Rouses Point, New York, and Leisure Tower in Lynn, Massachusetts. The department says all 56 units at Albert Carriere and 180 of 181 units at Leisure Tower currently or previously were subject to a Section 8 contract. Those figures are not a count of affected tenants.
As described in the announcement, HMR admitted that personnel preparing for government audits identified documentation deficiencies and then altered, supplemented, replaced, removed or created records without affected tenants' review or approval. The department says the changes were intended to address file deficiencies and make the files appear complete and compliant for government review.
The company also admitted that certain managers and compliance personnel knew of, directed or participated in the conduct. According to the release, the resulting statements and records were material to HUD's decision whether assistance payments were payable.
What the payment resolves
The matter arose from a civil complaint filed by a private party under the False Claims Act, which permits such parties to sue on behalf of the United States and share in a recovery. The Justice Department says the person who filed the complaint will receive $437,500 of the settlement proceeds.
The announcement describes admitted document handling and the civil settlement. It does not establish that any named tenant was ineligible, specify an individual tenant's circumstances, or describe relief to tenants. The settlement agreement and tenant files were not independently examined for this report.