Endangered Town

Kevin McAllister demands answers from the U.S. Department of Housing and Urban Development during a residents meeting concerning the Alexander County McBride and Elmwood Place public housing April 10 in Cairo.

ASSOCIATED PRESS

WASHINGTON — The U.S. Department of Housing and Urban Development on Tuesday announced the agency has filed a fraud complaint against two former officials of the Alexander County Housing Authority for allegedly using public housing funds for personal travel and gifts and submitting false documentation to the federal government.

Filed under the Program Fraud Civil Remedies Act of 1986, HUD’s complaint alleges former ACHA Executive Director James Wilson and former ACHA Finance Director and Executive Director Martha Franklin “knowingly overstated their travel expenses,” sometimes double-charging ACHA for unreasonable and unsubstantiated travel expenses, including hotel stays in Las Vegas, personal meals and alcohol and gifts to housing authority staff. The complaint also accuses Wilson of filing false statements regarding the ACHA’s compliance with civil rights laws and lead-based paint regulations.

HUD is seeking 125 civil penalties against Wilson and Franklin totaling $720,000 and another $188,000 in assessments based upon false claims the two made with respect to funds provided by HUD.

“Every dollar misspent on personal travel and other expenses is a dollar that could support the individuals and families we serve,” Dane Narode, associate general counsel of HUD’s Office of Program Enforcement, said in a news release. “Taxpayers deserve to know that the public programs they support are helping to meet the needs of the many, not the few.”

Each year, HUD provides assistance to public housing authorities primarily through its Public Housing Operating Fund and Public Housing Capital Fund. Annual subsidies under the operating fund are intended to support the operation and maintenance of public housing, enabling housing authorities to serve low-income households. HUD’s Capital Fund Program provides financial assistance to housing authorities to make needed improvements to existing public housing. Between 2012 and 2015, ACHA received a combined $9,136,686 from HUD through these programs.

Wilson served as ACHA’s executive director from 1989 to April 2013. Franklin was ACHA’s finance director from 2004 to April 2013 when she became executive director, serving through March 2015.

HUD claims that in their respective capacities, Wilson and Franklin:

  • Used public funds to pay for unreasonable and unsubstantiated travel expenses, including charging the housing authority for both mileage and airfare, using the housing authority’s credit card to pay for meals while collecting per diem, and using the housing authority’s credit card to pay for hotels while collecting lodging vouchers;
  • Used ACHA funds to pay personal expenses, such as personal meals and gift cards;
  • Misused federal funds to make payments to the chairperson of the board of ACHA;
  • Caused the housing authority to enter into an agreement with Wilson for consulting services in violation of conflict of interest rules; and,
  • Wilson also caused ACHA to falsely certify to HUD that the housing authority was in compliance with civil rights laws and HUD’s lead safety requirements.

In addition to the fraud complaint announced Tuesday, HUD is pursuing a related debarment action against Wilson and Franklin, excluding them from doing any business with the federal government indefinitely.

This is a developing story. It will be updated.

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Managing Editor, Digital

Managing editor of digital for the Herald & Review.

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