16 Chicago Housing Authority Workers Fired for PPP Pandemic Loan Fraud;  17th person resigned

Sixteen Chicago Housing Authority employees were fired and one resigned after an internal investigation found they committed federal program fraud when they submitted falsified Paycheck Protection Program applications to receive COVID-19 relief funds to residents. they were not eligible, the agency confirmed.

“As a mission-driven organization serving families, seniors and people experiencing housing insecurity, everyone who works at CHA must operate from a place of integrity,” CHA Executive Director Tracey Scott said in a statement. communication sent by email. “When one of us violates that trust, whether at work or outside of work, it affects all of us. While this is a difficult and disappointing time for CHA, we will use it as an opportunity to uphold a higher standard and recommit to our values ​​of integrity, consistency and responsibility.”

The investigation by the housing authority’s inspector general investigated all active CHA employees who were identified as having obtained the PPP loan but had not previously been authorized to hold a second job, or had not disclosed business income. external in its annual financial interest. statements.

The inspector general found that employees submitted falsified applications to the Small Business Administration, according to a CHA spokeswoman. As a result, 16 CHA employees were terminated on July 15, and the 17th resigned before the agency could act.

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the news continues a recent report from the watchdog that oversees Cook County government, which found that four employees had committed “financial fraud targeting the federal government” by improperly collecting approximately $120,000 in Payroll Protection Program loans intended to help businesses survive the pandemic. County Inspector General Patrick Blanchard recommended that they be placed on the county’s no-rehire list.

Three had worked in financially sensitive county departments. A fourth, who worked on the county Board of Review, had already resigned. None are named in that report, which is regular office practice.

The Office of the Independent Inspector General, the county’s watchdog, has been “in contact with federal and state officials regarding this line of OIIG investigations.”

The CHA did not immediately disclose the names or titles of the 17 employees, the amount of PPP loans they received, or whether the agency’s findings were forwarded to state or federal authorities.

CHA Inspector General Kathryn Richards has also been investigating whether CHA residents and program participants committed possible pandemic relief fraud as part of a broader PPP Loan Fraud Initiative. In an email to the Tribune, Richards says she will “provide a fuller summary” of the employee investigation in her next regularly scheduled quarterly report in mid-October.

In your quarterly report published last spring, Richards determined there was “a significant indicator” of such potential fraud, discovering that CHA participants had received $135 million in PPP loans.

The office identified CHA program participants matched with those who received PPP loans and found that 6,280 people (either heads of households or family members) had received them. Of those, 3,053 received loans of $20,830 or more, indicating they reported annual business income of just under $100,000.

An additional 2,520 PPP borrowers whose addresses matched the addresses of CHA participants were not authorized to live there by the agency.

“Given the widely reported high level of fraud in the PPP loan program … the OIG considers a large number of these loans to be suspicious and potentially fraudulent,” the report said, “raising concern” about whether those individuals cheated. to the CHA about your income. . The CHA sets income limits for voucher eligibility based on Housing and Urban Development guidelines. That voucher program subsidizes housing payments for low-income families. For a family of four, for example, the income limit for 2022 is $83,350.

In response, the department that runs the CHA’s housing choice voucher program told the inspector general that approximately 5,600 participants who could have received a PPP loan and 2,700 families with “unauthorized occupants who potentially used the unit addresses Subsidized applicants for a PPP loan” had been sent letters saying they must provide documentation of “alleged business income and the PPP loan.”

If those individuals do not respond or provide proper documentation, they could be removed from the CHA voucher program. The department is also following up with phone calls. The existing HCV program contractor “will review all documents to determine if participants submitted the correct documentation and provide CHA-HCV with a list of participants requiring a notice of intent to cancel the voucher. Participants who do not file a hearing request will be dropped from the program. Participants who submit a hearing request will be granted a hearing,” the IG report says.

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