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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

FOR IMMEDIATE RELEASE
Tuesday, November 1, 2016

City of Fairfield and the Fairfield Housing Authority Pay $680,000 to Settle False Claims Act Allegations

SACRAMENTO, Calif. — The City of Fairfield and the Fairfield Housing Authority (FHA) paid $680,000 to settle federal False Claims Act allegations that they received grants to fund two coordinator positions for a federal housing program but did not use the funds for that purpose, Acting United States Attorney Phillip A. Talbert announced today.

The FHA administers the Section 8 Housing Choice Voucher Program (HCV), the HCV Homeownership Program, and the Family Self-Sufficiency Program (FSS) for the City of Fairfield. Section 8 of the federal Housing Act of 1937 authorizes the payment of rental housing assistance to private landlords on behalf of low-income households. The HCV Program is the federal government’s major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. The FSS Program provides case management for Section 8 families who desire to improve their earning potential and move towards financial independence and homeownership.

According to court documents, the FHA, with the city’s approval, applied for and received federal grants from the Department of Housing and Urban Development (HUD) to fund two full-time FSS program coordinators from January 2012 through November 2014, but neither the city nor the FHA employed any full-time FSS program coordinators during that time. Court documents further allege that the FHA violated the False Claims Act by submitting data into HUD’s Voucher Management System, affirming that it was spending the grant funds on two full‑time FSS program coordinators, when no such coordinators were employed.

“Housing Authorities that receive HUD grants have a duty to help families in need,” said Acting U.S. Attorney Talbert. “When families try to become self-sufficient by applying to programs like Fairfield’s Family Self-Sufficiency Program, they deserve to be assisted at every step by dedicated and responsive professionals. This settlement helps to ensure that limited federal resources are used for that purpose.”

“HUD’s Family Self-Sufficiency program supports families living in public housing and those using Housing Choice Vouchers and working to increase their earned income,” said HUD Regional Administrator Jon Gresley. “With such limited resources available to help reduce household dependency on public subsidy, it is essential that the federal government steward these investments to maximize the benefit to eligible families in Fairfield and beyond. This agreement does that.”

The allegations resolved by the settlement were first raised in a lawsuit filed against the City of Fairfield and the FHA under the qui tam, or whistleblower, provisions of the False Claims Act by a former FHA employee. The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this matter will receive approximately $129,000 of the recovery.

This case was handled by Assistant United States Attorney M. Anderson Berry through a coordinated effort with the Department of Housing and Urban Development’s Eric Huhtala, Special Agent for the Office of Inspector General, and Ji Yoo, an attorney with the Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Topic(s): 
Financial Fraud
Press Release Number: 
2:15-cv-490 WBS
Updated November 1, 2016