Alleged Fraud By Federally Subsidized Renters Involving Housing Assistance Benefits Leaves Landlord Of 50-Unit Building Facing Foreclosure

In Fairhope, Alabama, the Press Register reports:

• Some Spring Run Apartments residents say the bills came without warning. Internal Revenue Service records had revealed that certain residents had under-reported their income to the U.S. Department of Housing and Urban Development, and now they faced eviction if they failed to pay back rent.

• Some of the back-rent bills were $3,000 or more, representing the federal housing authority's share of pay they had allegedly hidden for the past year, according to former tenants. Rent in government-subsidized housing is based on each tenant's income. And so, also without warning, many Spring Run residents moved out of Spring Run without paying the bills, federal housing officials said.

• Now, the federal government may foreclose on the property within a month or two. Officials with The Mitchell Company in Mobile, the 50-unit apartment complex's owner, said they are struggling to make mortgage payments because more than half of the tenants either left or were evicted after the back-rent bills were sent early last year.(1)

For more, see Feds may foreclose on Fairhope apartments (Problems over back rent at federally subsidized complex date from late 2007).

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For other stories on Federally subsidized tenants allegedly cheating the government out of housing assistance payments, see:

• U.S. Attorney press release: Broward County Woman Sentenced To 12 Months' Imprisonment For False Statements To HUD And Theft Of Government Monies,
• Failure To Report Living Companion Leads To Hot Water For Alleged Housing Assistance Cheats.

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For a story of three Miami, Florida women who sued the Miami Dade Housing Authority for allegedly stripping them of their housing benefits after accusing them of lying about their qualifications for housing entitlements, see Dade commissioners to vote on $60K housing settlement.

(1) Reportedly, the trouble over back-rent began in late 2007, when the managers of Spring Run Apartments began using the federal government's Earned Income Verification system. Using a tenant's Social Security number, a housing manager can find the income reported by that person to the Internal Revenue Service the previous year. If discrepancies are found, the tenant must be charged for the rent that would have been paid if accurate income information was provided. The property managers' inquiries using IRS records discovered that the occupants of more than 30 of the Spring Run complex's 50 units had under-reported income in the previous year and now owed back rent, the landlord said. But instead of paying the bills, many tenants left without notice.