Former Executive Director of St. Clair Housing Commission Pleads Guilty to Federal Program Fraud
The former executive director of the St. Clair Housing Commission, pleaded guilty today to conspiring to commit federal program fraud, Acting United States Attorney Daniel Lemisch announced.
Lemisch was joined in the announcement by Brad Gary, Special Agent in Charge of the U.S. Department of Housing and Urban Development and David P. Gelios, Special Agent in Charge, Federal Bureau of Investigation.
Lorena Loren, 55, of Nicholls, Georgia admitted to conspiring with several family members to steal federal funds provided to the Commission by the U.S. Department of Housing and Urban Development (‘HUD”) to administer HUD’s low-income housing programs within St. Clair County. Loren admitted to engaging in various fraudulent schemes to unlawfully obtain over $336,000 in federal funds.
According to court records, Loren stole approximately $162,000 earmarked for HUD’s Housing Choice Voucher program, commonly known as Section 8 housing, which allows low-income families to lease privately owned rental properties with the assistance of HUD rental subsidies administered by the Commission. As part of this fraudulent scheme, between August of 2008 and August of 2016, Loren fraudulently entered into Section 8 contracts from which, at various times, she and nearly all of her immediate family members directly benefitted, in violation of HUD’s regulations and guidelines. In addition to falsifying Section 8 housing contracts and lease agreements by using nominees for lease agreements for Loren’s son, Loren and several relatives falsely claimed they owned rental properties which were, in fact, owned by others; where former Section 8 tenants resided; and, owned by Loren herself. Loren, as executive director, then fraudulently issued Section 8 rental subsidy payments to relatives, in some instances, even in the names of former Section 8 tenants who were no longer in the program. Loren also directed family members to establish joint bank accounts to facilitate access to the ill-gotten funds by various members of her family. In addition, between 2010 and 2016, Loren used the Commission’s two credit cards to make unauthorized purchases of personal items for herself and relatives from Amazon.com, Walmart and Sam’s Club stores. Loren purchased, among other things, adult and infant clothing, furniture, food, beauty supplies, medications, other household items, and alcoholic beverages on the Commission’s cards. Loren had some of those purchases, totaling approximately $60,000, shipped to some of the same relatives involved in the Section 8 housing scheme at their residences in Georgia and Florida. Loren used the Commission’s operating budget, provided by HUD to maintain the Commission’s public housing facility, Palmer Park Manor, to pay for all the unauthorized purchases, which totaled nearly $166,000. Lastly, Loren also pocketed approximately $8,500 of the Commission’s petty cash funds.
HUD Special Agent in Charge Gary stated, ““At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those entrusted to public service are completely dedicated to those in need. The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Public Housing programs.”
As part of her guilty plea, Loren agreed to pay $336,240.62 in restitution to HUD.
A sentencing date has been set for January 23, 2018 at 2:00 p.m.. Loren faces a maximum of five years in prison and a fine of up to $250,000.
The case was investigated by agents of U.S. Department of Housing and Urban Development-Office of Inspector General and the Macomb Resident Agency of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Dawn N. Ison.