U.S. Department
of Justice
Press Release
Twin Cities Landlords To Pay $130,000 To Resolve Alleged Section 8 Housing Assistance Violations
For Immediate Release
U.S. Attorney's Office, District of Minnesota
Landlords collected thousands of dollars in illegal “side payments” from low-income tenants
To qualify for federal subsidies, the Defendant landlords certified in their contracts with local housing authorities that they would not charge side payments to Section 8 tenants above the rental amount, which was determined by local housing authorities based in part on the tenants’ income. However, between August 2007 and July 2014, Defendants allegedly collected at least $60,000 in illegal side payments from sixteen Section 8 tenants.
The Department of Housing and Urban Development (HUD) provides federal funding for Section 8 (officially called the Housing Choice Voucher Program). Housing choice vouchers are administered by local housing authorities. The housing subsidy is paid to the landlord directly by the local housing authority on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. HUD prohibits Section 8 landlords from charging the tenant any additional payments to ensure that rent is affordable for tenants, and to prevent landlords from taking advantage of low-income tenants seeking affordable housing.
“The False Claims Act is an important tool to protect the integrity of the Housing Choice Voucher program, and to ensure that landlords receiving federal subsidies abide by their commitments to the federal government and to their tenants,” said Assistant U.S. Attorney Pamela Marentette, who represented the United States in this matter.
The settlement resolves allegations originally brought forward by one of the tenants, Meria Murray. Ms. Murray filed her suit under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and share in any recovery. According to Ms. Murray’s complaint, Defendants insisted that she pay over $5,000 in side payments between 2009 and 2011 for a property she rented in Minneapolis.
The settlement agreement requires the Defendants to pay $130,000 to the United States. Ms. Murray will receive $18,000 as her share of the recovery in this case.
The case was handled by the U.S. Attorney’s Office for the District of Minnesota, and investigated and supported by the U.S. Department of Housing and Urban Development-Office of Inspector General.
The lawsuit is captioned U.S. ex rel. Meria T. Murray v. Richard Edlich, et. al. Case No.
13-sc-845 (JRT/JSM). The claims settled by this agreement are allegations only; there has been no determination of liability.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Updated September 17, 2015
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