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Press Release

Former Chelsea Housing Authority Executive and Former Public Housing Inspector Sentenced for Rigging Inspection Process

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – A former executive of the Chelsea Housing Authority (CHA) and a former public housing inspector were sentenced today for their roles in rigging the inspection process of federally funded housing units.

James Fitzpatrick, 63, of Acton, Mass., and Bernard Morosco, 50, of Utica, NY, were sentenced by U.S. District Court Judge Douglas P. Woodlock to three months and six months in prison, respectively, and one year of supervised release.  The two were convicted in April 2015 of conspiring to defraud the U.S. Department of Housing and Urban Development (HUD) by impairing, impeding, and defeating the proper operation of HUD’s inspection process. 

Pursuant to federal regulations, to determine whether a public housing authority is meeting the standard for its residents of conditions that are “decent, safe, sanitary, and in good repair,” HUD’s Real Estate Assessment Center (REAC) is required to “provide for an independent physical inspection of a public housing authority’s property or properties that includes, at a minimum, a statistically valid sample of the units in the CHA’s public housing portfolio to determine the extent of compliance with the standard.”  REAC inspections are conducted by independent contractors who have received training from REAC on the inspection protocol and applicable regulations, and have been certified by HUD.  Once certified, an inspector is given an inspector number, and with a password, can access the secure REAC server, which contains data on all public housing authorities and also later enable the inspector to generate a random sample of units to inspect on the scheduled date of the inspection.

Before the REAC inspections of the CHA in 2007, 2009, and 2011, Morosco gave Fitzpatrick, the Assistant Director of the CHA, an advance list that revealed which units at the CHA would be inspected.  During those years, Morosco, who was a REAC-certified inspector, worked for the CHA as a consultant, advising the CHA about how to get better scores on its REAC inspections. 

One or two months before each REAC inspection, using information provided by Fitzpatrick, Morosco accessed HUD’s secure database and downloaded information to which he was not entitled.  That information enabled him to use his REAC software to generate, in advance, the random sample that would later be generated by the assigned REAC inspector.  Morosco then gave the samples to Fitzpatrick who, in turn, provided it to the CHA’s Executive Director, Michael McLaughlin.

McLaughlin divided CHA employees into pairs, calling each pair a “SWAT team,” and sent them to inspect the units identified by Morosco.  For the month before each inspection, the “SWAT teams” visited several apartments a day, inspecting and re-inspecting them as maintenance crews visited the units to make repairs, fumigate, and exterminate.  When the REAC inspectors conducted the inspections, the units that were selected were the same as the ones provided in advance by Morosco.

McLaughlin, the former Executive Director of the CHA, was previously sentenced to serve an additional 12 months in prison for this offense after having already been sentenced to 36 months for other illegal conduct involving the CHA.

United States Attorney Carmen M. Ortiz and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office, made the announcement today.  The case was prosecuted by Assistant U.S. Attorneys S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit and Brian Pérez-Daple of Ortiz’s Economic Crimes Unit.

Updated July 2, 2015