PPP loan fraud leads to the layoff of 16 people at the Chicago real estate agency
Sixteen Chicago Housing Authority employees were fired and one resigned after an internal investigation found they committed federal program fraud by submitting falsified applications to the Paycheck Protection Program to receive funds from COVID-19 relief they were not entitled to, the agency confirmed.
“As a mission-driven organization that serves families, seniors and those experiencing housing insecurity, everyone who works at CHA must operate from a place of integrity,” said CHA CEO Tracey Scott in an emailed statement. “When any of us breaches that trust, whether on or off the job, it affects us all. Although this is a difficult and disappointing time for the ACH, we will use it. as an opportunity to hold ourselves to a higher standard and recommit to our values of integrity, consistency and accountability.
The Housing Authority Inspector General’s investigation covered all active CHA employees who had been identified as having obtained the PPP loan but had not previously been granted clearance for a second job or had not disclosed outside business income on their annual financial interest. statements.
The inspector general discovered that employees had submitted falsified claims to the Small Business Administration, according to a CHA spokeswoman. As a result, 16 CHA employees were fired on July 15 and the 17 resigned before the agency could act.
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The news follows a recent report by the watchdog that oversees the Cook County government, which found that four employees committed “financial fraud directed against the federal government” by wrongfully collecting approximately $120,000 in loans from the payroll protection program to help businesses survive the pandemic. County Inspector General Patrick Blanchard recommended that they be placed on the county’s no-rehire list.
Three had worked in financially sensitive county departments. A fourth, who worked at the county board of review, had already resigned. None are named in this report, which is standard office practice.
The Office of the Independent Inspector General, the county’s watchdog, has been “in contact with federal and state officials regarding this line of OIIG investigations.”
The CHA did not immediately release the names or positions of the 17 employees, the amount of PPP loans they received, or whether the agency’s findings were reported to state or federal authorities.
CHA Inspector General Kathryn Richards also investigated whether CHA residents and program participants had committed potential pandemic relief fraud as part of a broader pandemic relief fraud initiative. PPP loans. In an email to the Tribune, Richards says she will “provide a more complete summary” of the employee survey in her next regular quarterly report in mid-October.
In its quarterly report released last spring, Richards determined there was “a significant indicator” of such potential fraud, finding that CHA participants had received $135 million in PPP loans.
The office identified CHA program participants matching those who received PPP loans and found that 6,280 people (heads of households or family members) had received them. Of these, 3,053 received loans of $20,830 or more, indicating that they reported annual business income of just under $100,000.
Another 2,520 PPP borrowers whose addresses matched the addresses of CHA participants were not allowed to live there by the agency.
“Given the high and widely reported level of fraud on the PPP loan program … the OIG considers many of these loans to be suspicious and potentially fraudulent,” the report said, “raising concerns” about whether these individuals have misled the CHA about their income. . The CHA sets income limits for voucher eligibility based on housing and urban development guidelines. This voucher program subsidizes housing payments for low-income families. For a family of four, for example, the 2022 income cap is $83,350.
In response, the department that operates the CHA Housing Choice Voucher Program told the Inspector General that approximately 5,600 participants who could have received a PPP loan and 2,700 families with “unauthorized occupants who have potentially used the addresses of subsidized units when applying for PPP loans” had been letters sent in the post stating that they must provide documentation of the “alleged business income and PPP loan”.
If these individuals do not respond or provide the proper documentation, they could be expelled from the ACH voucher program. The department also monitors telephone calls. The current HCV Program Contractor “will review all documentation to determine if participants have submitted the correct documentation and will provide CHA-HCV with a list of participants who require notice of intent to terminate the bond. Participants who do not submit a hearing request will be excluded from the program. Participants who submit a hearing request will be granted the hearing,” the IG report states.