United States Reaches Settlement with Section 8 Landlords
DENVER – Bob Troyer, Acting U.S. Attorney for the District of Colorado, today announced that Deborah Conrads and Lawrence Conrads – residential landlords in Cortez, Colorado – have paid $73,650 to resolve allegations that they defrauded the Department of Housing and Urban Development by charging low-income tenants excessive rent in violation of HUD’s Housing Choice Voucher Program.
HUD’s Housing Choice Voucher Program provides low-income families, the elderly, and the disabled with assistance to afford decent, safe and sanitary housing in the private market. Housing choice vouchers are funded by HUD and administered locally by public housing authorities. When a landlord agrees to participate in the Housing Choice Voucher Program, the landlord benefits by receiving housing assistance payments directly from the public housing authority each month to cover a substantial portion of the rent of a unit. In exchange, the landlord agrees, among other things, that the public housing authority will determine the maximum rent for the unit and that the landlord will not receive any payments from the family for rental of the unit other than the family’s portion of the rent authorized by the public housing authority.
In 2001, the Conrads entered into such a housing assistance payment contract with the Housing Authority of the County of Montezuma for one of the Conrads’ rental units in Cortez, Colorado. The United States contends that despite the terms of that agreement, as recently as 2014 the Conrads knowingly charged the tenant family additional unauthorized rent and concealed these side payments from the public housing authority. In one instance, when the housing authority denied the Conrads’ request for a rent increase, the Conrads nonetheless entered into a lease extension that increased the rent paid by the family. Subsequent lease extensions in later years further increased the rent the Conrads were charging the family. The Conrads did not seek approval from the Montezuma Housing Authority for these later increases and did not provide the housing authority with copies of any of the lease extensions. The United States alleges that through this scheme, the Conrads extracted at least $18,000 in excess rent from the family while at the same time the Conrads were cashing housing assistance payments they received from federal funds as Housing Choice Voucher Program landlords.
“When landlords take advantage of the Section 8 program by charging low-income families excessive rent, they undermine HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all,” said Acting U.S. Attorney Troyer. “Landlords who defraud HUD face stiff civil penalties.”
“HUD has been working with the US Attorney’s Office to pursue justice against the abuse of the Housing Choice Voucher Program, a crucial resource intended to assist low income individuals and families with housing costs," said HUD Rocky Mountain Regional Administrator Rick M. Garcia. "Section 8 rental assistance is in high demand in this region, and fraudulent practices within these programs will not be tolerated.”
The claims settled by this agreement are allegations only. In entering into a civil settlement, the Conrads did not admit liability.
The United States Attorney’s Office thanks the Department of Housing and Urban Development, Office of the Inspector General, for their hard work and cooperation that made this recovery possible. The United States was represented in this matter by Assistant United States Attorney Jasand Mock of United States Attorney’s Office in Denver, Colorado.