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HUD Fraud

 

The U.S. Department of Housing and Urban Development (HUD) is often the victim of fraud that can be pursued by qui tam relators under the False Claims Act. HUD Fraud can arise in the agency’s mortgage, grant, assistance and regulatory programs. These include HUD’s Section 8 housing choice voucher program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market; HUD’s guarantee of Ginnie Mae mortgage backed securities (MBS); and HUD’s Fair Housing and Equal Opportunity cases and decrees.

HUD Fraud can also arise from disaster and emergency relief in its Community Development Block Grant Program (CDBG). Under CDBG, HUD provides grants to cities, counties, and States to recover from Presidentially declared disasters. Disaster Recovery grants are often used to provide affordable housing to disaster victims. More than $27 billion has been appropriated recently for disasters, such as hurricanes (Katrina, Rita, Sandy), floods and wildfires.

Notice: If you are a tenant please contact www.HUD.gov
(800) 872-9855

Notice: If you are an insider with financial records on your possession and you are willing to come forward with this info please call us at (212) 292-4573

1. What kinds of HUD Fraud do you find in the Section 8 housing voucher program?

One form of actionable misconduct is when the Section 8 landlord charges an improperly high rent that is passed along to the Government. Another is when the landlord falsely qualifies renters as Section 8 voucher eligible, when they are not. And, a third is when a landlord does not maintain housing in a decent, safe and sanitary condition.

2. There have been HUD Fraud whistleblower cases involving its Preforeclosure Sale Program, what are they about?

The Preforeclosure Sale Program is a HUD program that uses government aid to cover the shortfall for troubled homeowners who must sell their home for less than they owe on their mortgages (i.e., the homeowners are “under water”). The program ran from September 2010 to August 2011, paying more than $1.7 billion in claims on nearly 20,000 homes. To qualify, the homeowner must have faced an “unavoidable” financial crisis, been living in the home and proved that they did not have sufficient income to make monthly payments. HUD fraud may exist where there is a knowing false certification that these criteria have been met.

3. What is HUD’s Federal Housing Administration’s (“FHA’s”) Direct Endorsement Lender Program (“DEL program”)?

This is a program that delegates authority to participating private lenders to endorse mortgages for FHA insurance. HUD Fraud results where lenders submit false certifications to HUD, including false certifications that the lender was originating mortgages in compliance with HUD-FHA rules when in fact it was not. Another problem occurs when lenders falsely certify to HUD loans are eligible for FHA mortgage insurance when in fact they were not.

4. What would be an example of disaster relief HUD Fraud?

Submitting claims for payments for phony tenants or for tenants who did not live in assisted units during the relevant time period. Another example would be the knowing receipt of duplicate or multiple payments for the same person. A third source of HUD Fraud cases would be post-disaster procurement fraud.

5. Who investigates HUD Fraud allegations?

The Office of Inspector General, United States Department of Housing and Urban Development.

"Tim McInnis is an amazing attorney. He is intelligent, thorough, ethical, kind and he works very strategically in order to insure the best outcome for his clients. I would trust him with my life. He is not only an excellent attorney, but he is a compassionate person."
Denise A. Romano, January 2004

"Tim McInnis is a superb lawyer for whistleblowers. As both a relator and a lawyer I worked with for more than three and a

On October 14, 2020, medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, agreed to pay $18 million to settle allegations the company helped submit false claims to the federal Medicare and TRICARE programs and numerous state Medicaid programs by giving kickbacks to physicians and hospitals to induce the purchase and use of MMSI’s durable medical equipment devices and products. NYC attorney Timothy J. McInnis was a member of the legal team that successfully represented the whistleblower in the case, Charles J. (“CJ”) Wolf, M.D., who was the former Chief Compliance Officer of MMSI.

 

According to Dr. Wolf’s complaint and the government’s settlement agreement, for over six years MMSI paid kickbacks to physicians, medical practices, and hospitals. The payments were made indirectly under the guise of free advertising assistance, practice development, practice support, and so-called “educational” grants. All of this was intended to induce the healthcare providers to purchase and use MMSI’s products, including EmboSphere devices, which are used for uterine fibroid embolization procedures, and QuadraSphere devices, which are used for other types of embolization procedures. Among other things, MMSI used local advertising campaigns to steer patients to healthcare providers as a reward for past sales and to increase future purchases of MMSI products. Dr. Wolf and the government further alleged that MMSI disregarded numerous internal warnings, including from Dr. Wolf, that MMSI’s sales practices potentially violated the healthcare Anti-Kickback Statute (AKS).

 

The lawsuit was filed in the federal court in District of New Jersey, where attorney McInnis formerly served as an Assistant U.S. Attorney. The case is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). Of the $18 million MMSI is paying to settle the case, $15.21 million will be go to the U.S. Treasury, and the remaining $2.79 million will go to the approximately 30 individual states that also joined the lawsuit.

half years and his counsel and perseverance were always spot on. His work was critical to a successful settlement of the case."
Stephen B. Diamond, Esq., August, 2016

"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute."
Don A. Briscoe, September 2016

"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute."
Don A. Briscoe, September 2016

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