RECENT ACCOMPLISHMENTS OF THE

HOUSING AND CIVIL ENFORCEMENT SECTION

(updated November 4, 2009)

The Housing and Civil Enforcement Section of the Civil Rights Division is responsible for the Department’s enforcement of the Fair Housing Act (FHA), along with the Equal Credit Opportunity Act, Title II of the Civil Rights Act of 1964, which prohibits discrimination in public accommodations, the land use provisions of the Religious Land Use and Institutionalized Persons Act (RLUIPA) and the Servicemembers Civil Relief Act (SCRA).

Several cases we have filed or resolved recently exemplify our efforts to ensure the availability of the housing opportunities guaranteed by the Fair Housing Act. ⁽¹⁾ The complaints and settlement documents for the cases discussed in the text, as well as other cases handled by the Housing Section, can be found on the Housing Section's website at www.usdoj.gov/fairhousing/caseslist.htm.

Fair Lending

On September 30, 2009, the United States filed a complaint and proposed consent decree in United States v. First United Security Bank (S.D. Ala.), alleging discriminatory pricing of home mortgages and redlining in violation of the Fair Housing Act and Equal Credit Opportunity Act. The Federal Deposit Insurance Corporation (FDIC) initially referred this matter to the Department of Justice based on its finding of pricing discrimination, and the Division investigated and added the redlining claim. Under the settlement, which must be approved by the court, First United will open one new branch and expand existing operations in majority African-American areas of west central Alabama. The bank will also invest $500,000 in a special financing program, and spend more than $110,000 for outreach to potential customers, promotion of its products and services and consumer financial education in these areas.

On September 30, 2009, the United States filed a complaint and partial consent decree in United States v. Nara Bank; Union Auto Sales d/b/a Union Mitsubishi; Han Kook Enterprises, Inc., d/b/a Los Angeles City Hyundai, Garden Grove Hyundai, Han Kook Imports, Vermont Chevrolet, and Han Kook Motors, Inc. (C.D. Cal.). The complaint alleges that Nara Bank and the other named Defendants (dealerships in Nara’s automobile lending network) violated the Equal Credit Opportunity Act, on the basis of race or national origin. Specifically, the complaint alleges that Nara Bank and the Defendant dealerships charged non-Asian customers, many of whom are Hispanic, higher "overages" or "dealer mark-ups" than similarly-situated Asian customers. The partial consent decree resolves the government’s claims against Nara Bank only. The decree will enjoin the Bank, its officers, and its employees from discriminating on the basis of race or national origin, in violation of ECOA, against any loan applicant and/or consumer in the terms or conditions relating to the extension of credit, including the setting of overages in indirect automobile lending purchases. In order to remedy its part in the alleged discrimination, Nara Bank will pay $410,000 to compensate several hundred non-Asian borrowers who have been aggrieved by the discriminatory conduct. The consent order, which requires approval by the Court, will last for 3 years and 90 days.

On November 4, 2008, the court entered a consent decree in United States v. First Lowndes Bank (M.D. Ala.). The complaint, filed on September 29, 2008, alleged that the bank discriminated against African-American borrowers by charging them higher interest rates on manufactured housing loans than similarly-situated white borrowers, in violation of the Fair Housing Act and the Equal Credit Opportunity Act. This case resulted from a referral by the Federal Deposit Insurance Corporation. Under the consent order the Bank will pay $185,000 to compensate borrowers who were charged higher rates and is enjoined from discriminating on the basis of race in its home mortgage lending. In addition, the bank will implement new procedures to prevent discrimination in setting interest rates, and will provide enhanced equal credit opportunity training to its officers and employees who set rates for housing loans.

Rental Discrimination:

On November 3, 2009, the United States filed a proposed consent order, which, if approved by the court, will resolve United States v. Sterling (C.D. Cal.). The complaint, filed on August 7, 2006, alleged that Donald Sterling, Rochelle Sterling, the Sterling Family Trust, and the Korean Land Company, L.L.C. violated the Fair Housing Act on the basis of race, national origin and familial status by refusing to rent to non-Korean prospective tenants, misrepresenting the availability of apartment units to non-Korean prospective tenants, and providing inferior treatment to non-Korean tenants in the Koreatown section of Los Angeles. The United States also alleged that the Sterling defendants made statements and published notices or advertisements in connection with the rental of apartment units that expressed a preference for Korean tenants in the Koreatown section of Los Angeles and express discrimination against African-Americans and families with children in Los Angeles County. The proposed order, which requires court approval, would require the defendants to: (1) pay a total of $2.725 million in monetary damages and civil penalties; (2) implement a self-testing program over the next three years to monitor their employees’ compliance with fair housing laws at their Los Angeles County properties; (3) maintain non-discriminatory practices and procedures; and (4) obtain fair housing training for their employees who participate in renting, showing, or managing apartments at the Los Angeles County properties. The proposed order would settle the claims of the United States and the private plaintiffs. This settlement represents the largest monetary payment ever obtained by the Department of Justice in the settlement of a case alleging housing discrimination in the rental of apartments.

On October 29, 2009, the court entered a consent order in United States v. Rogers (D. S.D.), a Fair Housing Act case alleging that Phyllis and Richard Rogers, the owners of three buildings encompassing 28 units in Sioux Falls, South Dakota, refused to rent to families with children and stated this policy to tenants on numerous occasions. The complaint further alleged that Phyllis Rogers informed tenants and prospective tenants that she did not rent to African-Americans. The consent order provides for injunctive relief, $50,000 in damages to victims and a $9,000 civil penalty.

On October 15, 2009, the United States filed a complaint in United States v. TK Properties, LLC (D. S.D.), alleging that the owners and property managers of a 48-unit apartment complex in Sioux Falls, South Dakota failed to make repairs for and threatened to evict an African American family and two white families for racially-motivated reasons. Further, the complaint alleges that the defendants used pervasive racial epithets and engaged in threatening, harassing, and intimidating conduct in response to the residents’ filing of a discrimination complaint with the local housing authority.

On September 22, 2009, the court entered a consent decree in United States v. Witherington (S.D. Ala.), a Fair Housing Act case. The complaint, filed on July 23, 2008, alleged that the owners and managers of a mobile home park in Daphne, Alabama discriminated against a HUD complainant and her three minor children on the basis of familial status by denying them a mobile home lot because they had too many children. The defendants also imposed extra fees on residents with children and allowed no more than two children per household to occupy a mobile home. The consent decree requires defendants to pay $13,000 to the complainant and her children, set up a $91,130 victim fund for residents that were charged extra fees for children, and pay a $30,000 civil penalty to the United States. The decree also requires defendants to discontinue their discriminatory practices and to obtain fair housing training. The decree will remain in effect for four years.

On September 9, 2009, the United States filed a complaint in United States v. Georgian Manor (N.D. Ga.), alleging that a condominium complex in Atlanta maintained policies discouraging families with children from living in the complex.

On August 27, 2009 the court entered a consent decree resolving United States v. C.F. Enterprises, LLC (S.D. Fla.). The amended complaint alleged that the property manager at the time, Don Murroni, acting under the direction of Craig Forman, the president and sole shareholder of C.F. Enterprises, falsely told African Americans that no apartments were available and discouraged African Americans from applying. Murroni also allegedly offered to waive the application fee or other costs for white applicants, and told white testers that a selling point of College Square Apartments in Davie, Florida, was the absence of black tenants. The allegations were based on evidence obtained through the Department’s fair housing testing unit, where individuals present as potential renters to gather information about possible discriminatory practices. Under the consent decree, the defendants must pay a total of up to $140,000 to victims of discrimination and a civil penalty of $74,000 to the government. The settlement also requires C.F. Enterprises and Forman to implement and publicize a nondiscrimination policy and provide periodic reports to the Justice Department and to undergo training on the requirements of the Fair Housing Act.

On July 21, 2009, the United States filed a complaint in United States v. Biswas (M.D. Ala.), a Fair Housing Act case based on evidence developed by the Division’s fair housing testing program. The complaint alleges that the manager and maintenance worker of Rolling Oaks Apartments, while working as employees of the owner, made statements expressing a preference against African-American tenants, in violation of the Fair Housing Act.

On June 19, 2009, the United States filed a complaint in United States v. Indigo Investments, LLC (S.D. Miss.), alleging that the owner and managers of a mobile home park in Gulfport, Mississippi refused to rent or negotiate for rental based on race, discriminated in the terms and conditions of rental based on race, and intimidated, threatened, or interfered with tenants’ exercise or enjoyment of rights protected by the Fair Housing Act.

On May 15, 2009, the United States filed a complaint in United States v. Beck (D. Minn.). In that case, we alleged that the owners of a rental property in Detroit Lakes, Minnesota, refused to rent a unit to Ranesha Halliburton on the basis of her race (African-American).

On April 30, 2009 the court entered a consent decree in United States v. Triple H. Realty (D. N.J.). The complaint alleged that the defendants tried to force Hispanic and African-American tenants to transfer from one building to another to make room for Orthodox Jews whom were courted as tenants in 2002-2004. The complaint also alleged that the buildings in which non-Jewish tenants lived were in the rear of the property and had fewer amenities and were less well maintained than buildings at the front of the property that housed the new Jewish tenants. The United States also alleged that the incoming Jewish tenants paid less rent than non-Jewish tenants for comparable apartments. Pursuant to the consent decree, the defendants are required to pay $170,000 to compensate identified victims and an additional $30,000 to the United States as a civil penalty.

On December 8, 2008, the Court entered a consent order in United States v. Regent Court Apartments (E.D. Mich.), a Fair Housing Act case developed by the Division’s Fair Housing Testing Program. The complaint, filed on January 18, 2008, alleged that the owners and manager of a 102-unit apartment complex in Roseville, Michigan engaged in a pattern or practice of discrimination on the basis of race, and a denial of rights to a group of persons, in violation of the Fair Housing Act. The complaint alleged that white testers were offered apartments immediately, while African-American testers were told that there would be a long wait for any apartment availability. Under the consent order, the defendants will pay $25,000 each to three identified aggrieved persons, a $55,000 civil penalty, and $40,000 to an unidentified victim fund. In addition, the defendants must contract with a local fair housing organization to conduct compliance testing. The owners of the apartments have also terminated the employment of the defendant resident manager.

Sales Discrimination

On February 17, 2009, the court entered a consent decree in United States v. S & S Group, Ltd. d/b/a ReMax East-West (DeJohn) (N.D. Ill.), a Fair Housing Act case brought on behalf of the National Fair Housing Alliance (NFHA). The complaint, filed in July 2008, alleged race and national origin discrimination by S & S Group, Ltd, through its successor, S & W Elmhurst, LLC, a real estate agency that does business under the name RE/MAX East-West, and its former real estate agent, John DeJohn. The consent decree requires the defendants to pay $120,000 to NFHA, enjoins them from further unlawful practices on the basis of race and national origin that violate the Fair Housing Act and its implementing regulations, and requires the agency to obtain fair housing training for its employees, advertise that it does not discriminate, keep certain records, and report on its compliance periodically to the Department.

On November 6, 2008, the United States filed a complaint in United States v. Coldwell Banker Joe T. Lane Realty, Inc. (N.D. Ga.), a Fair Housing Act case alleging that a real estate agent made discriminatory statements about African Americans to a white tester posing as a potential home buyer and steered the white tester away from viewing and purchasing homes in African-American neighborhoods.

Insurance Discrimination:

On October 1, 2009, the court entered a consent decree resolving United States v. GuideOne Mutual Ins. Co. (W.D. Ky.), a Fair Housing Act case referred by HUD. The complaint, filed on September 18, 2009, alleged discrimination on the basis of religion because the defendants, an insurance company and two independent insurance brokers, provided insurance benefits for certain losses related to church activities. Two individual complainants and a local fair housing group filed complaints with HUD and elected to proceed in federal district court. Under the settlement, the defendants must pay a total of $29,500 to three victims of discrimination, an additional $45,000 to the government as a civil penalty and stop the alleged discriminatory practices. The settlement also requires GuideOne to train insurance agents on their responsibilities under the Fair Housing Act and provide periodic reports to the Justice Department. The consent decree will remain in effect for three years.

On January 19, 2009, the Court entered a consent decree in United States v. Erie Insurance Co. (W.D.N.Y.), a Fair Housing Act case. The complaint alleged that the defendants discriminated on the basis of race in the sale of homeowner’s and renter’s insurance in New York State. The case originated with complaints that the Fair Housing Council of Central New York (FHCCNY) and HUD’s Assistant Secretary for Fair Housing and Equal Opportunity filed with HUD. The consent decree requires the defendants to pay $225,000 to the FHCCNY; spend $140,000 on advertising targeted to African-Americans residing in redlined areas; submit regular reports to the DOJ; establish and follow non-discriminatory sales procedures; and undergo fair housing training.

Sexual Harassment:

On March 13, 2009, the United States filed a Fair Housing Act complaint in United States v. Hurt (E.D. Ark.) against Bobby L. Hurt, the former property manager for numerous mobile homes in and around West Memphis, Arkansas, alleging a pattern or practice of sexual harassment. The lawsuit also names as a defendant Bobby L. Hurt’s wife, Sue Hurt, who owned some of the properties at issue. The complaint alleges that Bobby Hurt, while providing property management services, entered the dwellings of female tenants without permission or notice, touched female tenants in an unwelcome sexual manner, made verbal sexual advances, and threatened to and took steps to evict female tenants when they refused or objected to his sexual advances.

On January 29, 2009, the United States filed a complaint in United States v. Johnson (E.D. Mich.) against Ronald D. Peterson and Glen E. Johnson, the owner and rental manager of eleven single family homes in Ypsilanti, Michigan. The complaint alleges that Johnson made unwanted verbal sexual advances, entered the apartment of female tenants without permission or notice, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances. The complaint also alleges that Mr. Peterson is liable for Mr. Johnson’s alleged misconduct, and that he knew or should have known of Johnson’s alleged misconduct but failed to take reasonable preventive or corrective measures. This case is being handled jointly by the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Michigan. This matter was referred to the Department by the Fair Housing Center of Southeast Michigan.

Disability Discimination:

On September 9, 2009, the United States Attorney's Office filed a complaint in United States v. Sunrise Villas, LLC (E.D.N.Y.), alleging that the defendants violated the Fair Housing Act by telling fair housing testers that service animals were not permitted to live at the property.

On August 19, 2009, the court entered a consent order resolving United States v. Rathbone Retirement Community, Inc. (S.D. Ind.), a Fair Housing Act case alleging that a retirement community violated the Fair Housing Act by prohibiting the use of motorized wheelchairs and scooters in the common dining room during meals and in all residents’ apartments. Under the consent order, the corporate operator of the retirement community and its manager will pay a total of $70,000 to three former residents of the home, establish a $25,000 settlement fund and pay the government a $21,000 civil penalty.

On July 30, 2009, the United States Attorney’s Office filed a complaint in United States v. Lund (D. Minn.), alleging that the owners and managers of a four-unit apartment building in Roseau, Minnesota violated the Fair Housing Act on the basis of disability by refusing to rent a unit to a woman because her daughter used a service animal.

On May 6, 2009, the United States Attorney’s Office filed a complaint in United States v. Berk-Cohen Associates at Tor View Village Apartments, LLC (S.D.N.Y.), a Fair Housing Act pattern or practice case. Loeb House, a housing services organization for persons with mental disabilities, guaranteed rent or otherwise assisted clients in meeting their rental obligations for 20 units at Tor View Apartments. The complaint alleges that the defendant discriminated against Loeb House and its clients when it threatened to no longer accept Loeb House’s rental guarantees or other housing assistance.

On May 1, 2009 the United States filed a complaint in United States v. Fitchburg Housing Authority (D. Mass.), alleging that the defendants violated the Fair Housing Act by denying a reasonable accommodation to the complainant, who requested to move to a different apartment because of her disabilities, and that the defendants implemented discriminatory transfer and reasonable accommodations policies. This case was referred to DOJ by HUD.

On February 6, 2009, the United States entered into an out-of-court settlement agreement with Reading Housing Authority ("RHA"), under which RHA will set aside 5% of its annual capital funding to create, through new construction or renovation, at least 5 two-bedroom accessible housing units, and will renovate kitchens in one of its developments upon request by a tenant. RHA also will maintain a list of landlords who participate in the Section 8 program that includes information about whether each has accessible units, and will provide that information to all tenant participants who have received a housing voucher. Finally, RHA has adopted and agreed to implement a new Assistance Animal Policy that will protect the rights of persons with disabilities to keep assistance animals. This case was referred to DOJ by HUD.

On June 2, 2008, the court entered a consent decree resolving United States v. Hussein (D. Conn.). The lawsuit, which was referred by HUD, alleged that the defendant refused to grant a reasonable accommodation from his no-pets policy so that his tenant's minor daughter could work with an assistance dog to help with her cerebral palsy, seizure disorder, and depression. The lawsuit further alleged that the defendant retaliated against the mother and daughter after they attempted to exercise their rights under the Fair Housing Act by refusing to renew their annual lease and beginning eviction proceedings. The tenant and her daughter filed a separate lawsuit that also is resolved by the consent decree. Under the consent decree, the defendant will pay $115,000 in monetary relief, including $102,000 to compensate the tenant and her daughter and $13,000 in attorneys fees.

"Design and Construction" Cases:

On September 30, 2009, the United States filed a complaint against the builder, owner, designer, and design firm in United States v. Portzen Construction, Inc. (S.D. Iowa), a Fair Housing Act case based on a referral by HUD. The complaint alleges that the defendants discriminated on the basis of disability by designing and constructing two Davenport-area apartment complexes that were inaccessible to persons with disabilities.

On August 26, 2009, the United States filed a complaint in United States v. Riverwalk Condominiums, LLC (D. Idaho), alleging that defendants failed to design and construct a Boise, Idaho condominium with the accessibility features required by the Fair Housing Act.

On August 3, 2009, the court entered a consent decree in Unites States v. Summerland Heights GP, L.L.C. (E.D. Va.) resolving allegations that the Summerland Heights Apartments, an apartment complex in Woodbridge, Va., violated the Fair Housing Act’s design and construction requirements. The complaint, which was filed on July 31, 2009, alleges that the defendants failed to make the ground floor units and common areas accessible to individuals with disabilities. Under the settlement, the defendants will pay all costs related to retrofitting the apartment complex and will establish a $40,000 fund to compensate individuals harmed by the inaccessible housing. The settlement also requires the defendants to undergo training on the requirements of the Fair Housing Act.

On May 26, 2009, the court entered a consent order in United States v. Douglass (E.D. Wash.). The complaint alleged that a developer, three architects and two engineers designed and constructed four multifamily apartment complexes in violation of the accessibility requirements of the Fair Housing Act and the Americans with Disabilities Act. The consent order requires the defendants to provide accessible routes and parking in the common and public use areas, replace knob door hardware with lever hardware, widen doorways in ground floor units, and reconfigure bathrooms and kitchens to accommodate persons who use wheelchairs. The consent decree also provides for the establishment of a $120,000 damages fund to compensate individuals harmed by the inaccessible housing, a $10,000 civil penalty against the developer, and training on the accessibility requirements of the Fair Housing Act.

On May 6, 2009, the United States filed a complaint against the builder, owners/developers, and a draftsman in United States v. Equity Homes, Inc. (D. S.D.), alleging that the defendants violated the Fair Housing Act by designing and constructing six Sioux Falls-area apartment complexes and condos to be inaccessible to persons with disabilities.

On April 14, 2009, the court entered a consent order in United States v. DKCD, Inc. d/b/a Renaissance Development(W.D. Ky.). The complaint alleged that 22 defendants, including owners, developers, architects and engineers, violated the Fair Housing Act and the Americans with Disabilities Act in the design and construction of 12 multifamily housing developments with over 800 covered dwelling units in Louisville, Kentucky. The consent order requires the defendants to retrofit walkways, parking, door hardware and thermostats and to reconfigure bathrooms and kitchens. In addition, the defendants must pay $255,000 to compensate victims and $25,000 in civil penalties to the government.

On March 4, 2009, the United States filed a pattern or practice complaint in United States v. JPI Apartment Construction, L.P. (N.D. Tex.), alleging that JPI failed to comply with the design and construction requirements of the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA) in the design and construction of two multi-family housing complexes in Texas and some of JPI’s other 205 nationwide multi-family properties.

On January 26, 2009, the court entered a consent decree in United States v. Summerland Heights III, L.P. (E.D. Va.). The complaint, which was filed on January 16, 2009, alleged that the defendants had failed to design and construct an apartment complex in Woodbridge, Virginia in accordance with the Fair Housing Act and the Americans with Disabilities Act. Under the consent decree, the defendants will pay all costs related to making the apartment complex accessible, establish a $30,000 fund to compensate individuals harmed by the inaccessible housing and pay a $20,000 civil penalty.

On January 12, 2009, the United States filed a complaint in United States v. Enclave Development, L.L.C. (E.D. Mich.), alleging that the owners, developers, builders, engineers and architects violated the Fair Housing Act when they failed to design and construct 200 ground-floor units at the Enclave Apartments in Washington Township, Michigan in compliance with the FHA’s accessibility provisions.

Discriminatory Land Use and Zoning Practices

On March 13, 2008, the court in United States v. City of Boca Raton (S.D. Fla.) issued an order enjoining the city from enforcing part of an ordinance that targeted substance abuse treatment facilities ("SATFs") for more restrictive treatment than comparable housing for non-disabled persons. The United States contended that the ordinance placed restrictions on a particular type of housing for persons in recovery from alcohol or drug dependency without a legally sufficient justification. Under the court's ruling, the city cannot prevent licensed SATFs with separate housing and treatment components from operating their residential components in residential multifamily and other zoning districts. As a result, one such facility currently operating in Boca Raton will be able to continue to operate its residential component in a multifamily district and will not have to obtain a different license from the state that the city deemed more acceptable.

In addition to these and the many other cases that we bring to ensure fair housing opportunities, the Division also is involved in ongoing efforts to educate the public and various entities involved in the housing industry about their rights and responsibilities under the Fair Housing Act. On March 5, 2008, we issued a Joint Statement on Reasonable Modifications under the Fair Housing Act with the Department of Housing and Urban Development. The joint statement provides technical assistance, in a series of questions and answers, regarding the rights and obligations of persons with disabilities and housing providers relating to reasonable modifications, and is available online at http://www.usdoj.gov/crt/housing/fairhousing/reasonable_modifications_mar08.pdf.

In 2004, we issued a Joint Statement on Reasonable Accommodations with HUD, providing technical assistance relating to reasonable accommodations under the Fair Housing Act. It is available online at http://www.usdoj.gov/crt/housing/jointstatement_ra.htm.

Since 2005, we have held Multi-Family Housing Access Forums, intended to assist developers, architects and others understand the FHA’s accessibility requirements, and to promote a dialogue between the developers of multi-family housing and persons with disabilities and their advocates. We have held events in Houston, TX; Chantilly, VA; Dallas, TX; Atlanta, GA; Phoenix, AZ; Minneapolis, MN; Miami, FL; Seattle, WA; and Philadelphia, PA. The Division’s next Access Forum will be held on Tuesday morning, November 17, 2009, at the Hyatt Regency Crown Center in Kansas City, Missouri. For more information, see http://www.usdoj.gov/crt/housing/fairhousing/access_forum.htm.

Public Accommodations (Title II)

On May 18, 2009, the court entered an agreed order to extend or modify and extend parts of the original consent order in CBOCS, Inc., f/k/a Cracker Barrel Old Country Store, Inc. (N.D. Ga.), a Title II case filed on May 18, 2004. The complaint alleged that the company had engaged in a pattern or practice of discrimination against African-American customers of its restaurants. The agreed order continues or modifies certain complaint processing requirements, including the auditing of complaint investigations by newly-retained consultants, as well as related training and other provisions of the original order.

Religious Land Use and Institutionalized Persons Act (RLUIPA)

On January 30, 2009, the Court entered a consent decree in United States v. Metro. Gov. of Nashville (M.D. Tenn.). The complaint filed in September 2008, alleged that the municipality discriminated against a a Teen Challenge a drug rehabilitation program with a religious mission on the basis of disability in violation of the Fair Housing Act and imposed a substantial burden on religious exercise, without sufficient justification, in violation of RLUIPA. The consent decree requires the Metropolitan Government to train nearly 100 employees and officials who make zoning and land use decisions on the requirements of the Fair Housing Act and RLUIPA, appoint a compliance officer to receive complaints and ensure compliance with the settlement, and provide periodic reports to the Justice Department. As part of the settlement, the Metropolitan Government rescinded the amendment to its zoning code that affected Teen Challenge and adopted a reasonable accommodation policy for individuals with disabilities. The Metropolitan Government will also pay a $20,000 civil penalty to the United States and $50,000 to participants in Teen Challenge’s program. Monetary relief to the Teen Challenge organization is being determined by the final court order in the related private case.

Servicemembers Civil Relief Act (SCRA)

On November 2, 2009, the United States filed an amended complaint in United States v. Aristocrat Towing, Inc. (E.D. Va.), alleging that a towing company in Norfolk, Virginia violated the SCRA by towing and selling servicemembers’ cars without court orders. On June 24, 2009, the court issued an order denying the Defendants’ Motion to Substitute Plaintiff Pursuant to Fed.R.Civ.P. 17 or, in the Alternative, to Dismiss the Complaint for Lack of Standing. The United States Navy referred this matter to the Department of Justice.

On September 25, 2009, the court entered a consent order resolving United States v. Akhavan (E.D. Va.), a case brought under the SCRA. The matter first came to the Department as a referral from the Civil Law Division Chief at Robins Air Force Base in Georgia. The complaint, which was filed on September 24, 2009, alleged that Ms. Ferdows Akhavan, a Virginia landlord, violated the SCRA when she refused to return rent paid in advance and a security deposit to her former tenant, a United States Air Force Colonel. Under the consent order, Ms. Akhavan must pay her former tenant $5,650 in damages and is enjoined from engaging in future violations of the SCRA.

On December 12, 2008, Homecomings Financial, LLC and GMAC Mortgage, LLC and their affiliates, including but not limited to GMAC Bank and Residential Funding Company, LLC, signed a letter resolving our SCRA investigation. This matter arose when United States Air Force Master Sergeant Brenda S. Gomez received permanent change of station orders transferring her from Tinker Air Force Base to Vance Air Force Base. When she sold her home to move closer to the new base, Homecomings denied MSgt Gomez’s request to waive the prepayment penalty on her residential mortgage loan. As a result of the Justice Department’s investigation, Homecomings has refunded MSgt Gomez’s $9,144 prepayment penalty and has agreed to waive the prepayment penalties of servicemembers in the future who are transferred involuntarily to a base thirty miles or more from their current residence. This policy will apply to loans on owner-occupied properties serviced by Homecomings or GMAC Mortgage, LLC with respect to which one of the following entities retains the contractual right to receive the prepayment penalty: Homecomings or GMAC Mortgage, LLC or either entity's affiliates, including, but not limited to, the Residential Funding Company, LLC and GMAC Bank.