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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Pennsylvania

FOR IMMEDIATE RELEASE
Monday, August 8, 2016

Firms That Formerly Owned And Managed Sherman Hills Apartments In Wilkes-Barre Agree To Pay $125,000 To Settle Federal False Claims Act Civil Allegations

SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sherman Hills Realty LLC and Park Management LLC (collectively referred to as “Sherman Hills Realty”), have agreed to pay $125,000 to resolve allegations that Sherman Hills Realty violated the False Claims Act. 

The United States alleges that Sherman Hills Realty failed to provide qualifying tenants with utility reimbursement funds and instead kept the funds.  The funds were provided by the United States Department of Housing and Urban Development (HUD) to Sherman Hills Realty to be disbursed to low and no income tenants at the Sherman Hills Apartments in Wilkes-Barre, Pennsylvania.   

According to United States Attorney Peter Smith, this settlement agreement resolves allegations that Sherman Hills Realty, which has its headquarters in Brooklyn, New York, was an owner and manager of a multifamily property located at 300 Parkview Circle, Wilkes-Barre, PA (Sherman Hills Apartments) and failed to provide some of the qualifying low and no income tenants at the facility with utility reimbursement funds during the period April 1, 2011 through April 30, 2014. 

Pursuant to a Housing Assistance Payments (HAP) contract, Sherman Hills Realty was required to submit to HUD accurate utility reimbursement requests for qualifying low and no income tenants on each of the monthly vouchers submitted to HUD.  Pursuant to the HAP contract and HUD policies and regulations, Sherman Hills Realty had an obligation to provide Sherman Hills Apartment tenants with utility assistance payments or credit the funds back to HUD.  Sherman Hills Realty was not permitted to retain funds for utility assistance payments if the funds were not provided to the tenants.  The purpose of the funds is to assist very low or no income tenants with the provision of basic necessities. 

Sherman Hills Apartments was taken over by another company in April 2014.

According to Brad Geary, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General, “This settlement is the latest example of our continued effort to collaborate with the Department of Justice as a means to protect HUD subsidized residents with the greatest financial needs.  This agreement could not have occurred without the selfless efforts of prosecutors and investigators, who ensured HUD's program was not compromised at the expense of its tenants."

The case is the result of an investigation by the United States Attorney’s Office for the Middle District of Pennsylvania and the United States Department of Housing and Urban Development, Office of Inspector General.  The case was litigated by Assistant United States Attorney Timothy S. Judge. 

Tenants and former tenants of Sherman Hills Apartments seeking information concerning utility reimbursement funds that may have been wrongfully withheld by Sherman Hills Realty LLC and/or Park Management LLC should contact the Philadelphia Regional Office of the U.S. Department of Housing and Urban Development, 100 Penn Square East, Philadelphia, PA 19107 at (215) 656-0500.

 

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Updated August 8, 2016