U.S. Department
of Justice
Kentucky Man Pleads Guilty to Defrauding Federal and State Housing Programs
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ---- Acting United States Attorney Beth Drake stated today that Erick Bradshaw, Sr., age 41, of Kentucky, pled guilty Thursday, September 1, 2016, in federal court in Greenville, to conspiracy to defraud federal and state housing programs, a violation of Title 18, United States Code, Section 371. United States District Judge Bruce Howe Hendricks, of Charleston accepted the plea and will impose sentence after she has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Fresh Start Community Development Corporation (FSCDC) was created by Bradshaw as a non-profit organization that worked on repairing homes through grants from the South Carolina State Housing Finance Development Authority (“SC Housing”) and the Federal Home Loan Bank of Atlanta (“FHLBank Atlanta”). Bradshaw was the executive director of FSCDC.
Bradshaw sought grant monies from FHLBank Atlanta and SC Housing for the rehabilitation of low-income homes. He forged the signature of contractors on FHLBank Atlanta Funding Certifications and SC Housing Certifications of Payment. He also submitted certifications to FHLBank Atlanta and Draw Request for Payments to SC Housing that had inflated costs compared to the invoices of the contractors who actually performed the work. Often some work described as completed on the certifications such as handicap ramps on front porches were never completed though it was represented in documentation that the work was complete.
Agents interviewed Bradshaw and he admitted that FSCDC did not do what it was supposed to do. Contrary to program rules, Bradshaw negotiated with the contractors who were working on the houses for lower prices than were reported to the agencies. For example if SC Housing funded a roof repair for $5,000 based on documents submitted by FSCDC, and Bradshaw was able to negotiate with the contractor for $3,000, then FSCDC would keep the $2,000 difference. Bradshaw did this for some of the FHLBank funded properties, too.
The loss suffered by the programs is approximately $282,000.
According to Special Agent in Charge Tim Mowery of the Federal Housing Finance Agency, Office of the Inspector General, “The Affordable Housing Program funded by the Federal Home Loan Banks is meant to help the most vulnerable in society with their housing needs. When someone takes advantage of the program to profit for their own benefit, we will make sure they are brought to justice.”
Ms. Drake stated the maximum penalty Bradshaw can receive is a fine of $250,000 and/or imprisonment for 5 years, plus a special assessment of $100.
The case was investigated by agents of the Internal Revenue Service, United States Postal Inspection Service, and the Inspector General’s Office of the Federal Housing Finance Agency. Assistant United States Attorney Bill Watkins handled the case.
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