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WASHINGTON, D.C. The Justice Department today reached a settlement in which several Mississippi landlords will give up management of their rental properties and pay $330,000 in civil penalties and damages to resolve allegations that they used racially coded vacancy lists and telephone logs to segregate and exclude African-Americans from apartment complexes, trailer parks and other properties.

The Justice Department lawsuit, filed in December 2000, accused Alden "Bubber" Wallace, III, his wife Priscilla Wallace, and his mother Nell Wallace of violating the federal Fair Housing Act by dividing their Meridian, Mississippi rental properties into better quality "white" or "No. 1" homes and inferior quality "black" or "No. 2" homes. The complaint also names four local companies, Amerihomes, LLC, The Management Group, LLC, Wallace Management & Developers, Inc. and Wallace Rentals, LLC as co-defendants.

According to the lawsuit, the Wallaces, operating through the four local companies, required employees to code telephone inquiries according to this racial system and to prohibit African-American and mixed-race families from renting the "No. 1" properties.

"It is shocking and sad that some landlords still go to such lengths to engage in racial discrimination that has been illegal for more than thirty years, and which simply has no place in today's society," said Ralph F. Boyd, Jr., Assistant Attorney General for the Justice Department's Civil Rights Division. "This settlement sends the message that landlords who discriminate on the basis of race will pay a heavy price."

The court-approved settlement resolves allegations that the defendants racially discriminated in virtually every aspect of their residential rental property business. The lawsuit accused the defendants of denying families the opportunity to rent particular housing on the basis of race and ignoring maintenance problems at "black" or "No. 2" properties. Additionally, they evicted African-American and mixed-race families who had been placed in "No. 1" properties contrary to the discriminatory policy.

The consent decree, approved today by Chief Judge Tom Lee of the U.S. District Court in Jackson, Mississippi, requires the Wallaces and their co-defendants to pay a $20,000 civil penalty and $310,000 for a victims fund. The fund will compensate victims of the alleged discrimination.

In addition, the defendants must turn over management of their more than 200 residential properties to an outside company. The settlement permanently bars Mr. Wallace, his wife, and his mother from any involvement in tenant affairs, including tenant selection, maintenance and evictions. Mr. Wallace is prohibited from entering the rental properties unless they are vacant and he is escorted by management company staff. The settlement also provides for fair housing training, implementation of new policies and five years of monitoring.

Dunn Lampton, United States Attorney for the Southern District of Mississippi said, "This case reminds us that the fight for equal housing is not over. This case is even more offensive because people were placed on racially coded lists for housing based not only on the color of their skin, but also because of the sound of their voice. This is the first settlement in a race discrimination case which permanently bars the individual defendants from the management of their properties and it should serve as a wake-up call to any landlords engaged in similar conduct."

The United States Attorney's Office jointly investigated and litigated the case in cooperation with the Justice Department's Civil Rights Division.

Properties affected by the settlement include homes throughout the city of Meridian in addition to the Valley Mobile Home Park, the Louie Lee apartment building on Frontage Road, and other trailer parks and single-family homes on Jeffrey Acres Road, Causeyville Road, and Long's Lane.

The Justice Department is asking persons who think they may have been harmed by the alleged discrimination to contact the United States Attorney's Office at 601-965-4480 or the Justice Department's Housing and Civil Enforcement Section at 1-800-896-7743.