DOJ: Historic $1.2 Billion Settlement In New York City Housing & Child Welfare Fraud - Are Detroit & Michigan Next?

The federal complaint and settlement decree is based on child welfare fraud.

Children residing in properties of New York City Housing Authority (NYCHA) were intentionally subjected to lead poisoning, under the guise of millions and millions, generations and generations, in fraud.

The Detroit Land Bank Authority, et al and Michigan are next, because the Celestial Goddess of the Woodshed has issued her public decree for these people to stop using children as chattel.

Manhattan U.S. Attorney Announces Settlement With NYCHA and NYC To Fundamentally Reform NYCHA Through the Appointment Of a Federal Monitor and the Payment By NYC Of $1.2 Billion Of Additional Capital Money Over the Next Five Years

Consent Decree Provides Comprehensive Relief, Requiring NYCHA to Promptly Address Lead Paint Hazards, Remedy Mold and Pest Infestations, and Provide Adequate Heat and Elevator Service

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Ben Carson, Secretary of the U.S. Department of Housing and Urban Development (“HUD”), Helen M. Albert, Principal Deputy Inspector General, performing the duties of the Inspector General, HUD Office of the Inspector General (“HUD OIG”), and Scott Pruitt, Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today the simultaneous filing of a Complaint against defendant NEW YORK CITY HOUSING AUTHORITY (“NYCHA”) and a proposed settlement agreement, in the form of a Consent Decree, with NYCHA and the City of New York (the “City”).  The Complaint alleges that NYCHA for years has violated and continues to violate basic federal health and safety regulations, including regulations requiring NYCHA to protect children from lead paint and otherwise to provide decent, safe, and sanitary housing.  The Complaint further alleges that NYCHA has repeatedly made false statements to HUD and the public regarding its lead paint compliance, and has intentionally deceived HUD inspectors.  To fundamentally reform NYCHA and ensure that it provides housing that complies with federal law, the Consent Decree – which is subject to the review and approval of the Court – imposes a strong federal Monitor and requires the City, among other things, to provide $1.2 billion of additional capital funding to NYCHA over the next five years, and $200 million every year thereafter until the problems are fixed and the Consent Decree is no longer necessary.

Along with other federal, state, and city funding, there will be approximately $ 4 billion available for capital improvements the first four years.

U.S. Attorney Geoffrey S. Berman stated:  “NYCHA’s failure to provide decent, safe, and sanitary housing is simply unacceptable, and illegal.  Children must be protected from toxic lead paint, apartments must be free of mold and pest infestations, and developments must provide adequate heat in winter and elevator service.  NYCHA has put its residents at risk.  Today’s unprecedented settlement will improve life for the 400,000 residents who call NYCHA home, while ensuring accountability, reform, and oversight at this troubled institution. The City’s commitment of resources to NYCHA is extraordinary and promises real relief for NYCHA residents.”

HUD Secretary Ben Carson said:  “This historic agreement marks a new era for New York City’s public housing, one that puts families and their children first.  New York City and New York State are making an unprecedented commitment to put NYCHA on a new path.  The cooperation of Federal, State and city officials will vastly improve the living conditions for hundreds of thousands of New Yorkers who call NYCHA home.”

HUD OIG Principal Deputy Inspector General Helen M. Albert said:  “We are proud of the integral work that the OIG staff performed which led to today’s settlement.  This represents a consequential partnership with the U.S. Attorney and others to ensure that those who reside in NYCHA housing will do so in safe and sanitary conditions.”

EPA Administrator Scott Pruitt said:  “Instead of protecting children from lead poisoning, NYCHA systematically violated EPA and HUD lead paint safety regulations and covered up its noncompliance.  Today’s landmark settlement puts a stop to that.  It is not only a great example of what EPA and HUD can achieve by working together, but it also sends a strong message to housing authorities, landlords, and renovators – violating the law and endangering public health will not be tolerated.  This agreement will dramatically improve the living conditions of New York City’s most vulnerable residents.”  

According to the Complaint filed today in Manhattan federal court:

For years, NYCHA has failed to comply with key HUD and EPA lead paint safety regulations, including by failing to inspect apartments for lead paint hazards and failing to remediate peeling lead paint.  NYCHA also fails to ensure that its workers use lead-safe work practices.  Children have been harmed as a result of NYCHA’s failures.  Between 2010 and 2016, at least 19 lead-poisoned children were found to have been exposed to deteriorated lead paint in their NYCHA apartments, and thousands more were put at risk. 

NYCHA also fails to provide “decent, safe, and sanitary” housing as required by HUD regulations.  Mold grows unchecked at many NYCHA developments, often on a very large scale, threatening the health of residents with asthma.  Across the city, NYCHA residents are provided inadequate heat in winter, leading to frigid apartment temperatures.  Pest and vermin infestations are common.  Elevators fail, leaving elderly or disabled residents trapped in their apartments or sleeping in building lobbies. 

NYCHA has repeatedly made false statements to HUD and the public regarding these matters.  These include false certifications by NYCHA each year that it would comply with HUD’s lead paint safety regulations.  NYCHA also deceived HUD about living conditions at NYCHA, going so far as to publish a “Quick Tips” training guide for how to hide conditions from HUD’s inspectors.

*                *                *

The United States has filed a proposed Consent Decree today, which would resolve the allegations in the Complaint.  The Consent Decree remains subject to review and approval by the Court.  The Consent Decree provides for the appointment of a federal monitor to oversee fundamental reform at NYCHA.  The Monitor has the authority, under the review of the Court, to set the performance standards that NYCHA must meet, devise the plans by which NYCHA will achieve those standards (including by implementing changes to NYCHA’s management, organization, and workforce structure), and require NYCHA to select independent contractors to perform certain work.  The Monitor will be selected by the United States, after consultation with City and state officials and NYCHA stakeholders, and subject to approval by the Court.

The Consent Decree also commits the City of New York to provide an additional $1 billion in capital funds over the next four years, over and above what the City has budgeted, and at least an additional $200 million in capital funds each subsequent year until the conditions identified in the Complaint are addressed.  Further, the Consent Decree requires NYCHA to comply immediately with HUD’s and EPA’s lead-safe work practices rules and to provide notice to residents in any apartment where NYCHA has identified lead paint.

*                *                *

In the Consent Decree submitted today, NYCHA admits, acknowledges, and accepts responsibility for the following:

• • At least once a year, beginning no later than 2010 and extending through 2016, NYCHA’s certifications to HUD contained untrue representations that NYCHA “will comply with” HUD’s federal lead paint safety regulations.
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  • In more than half of NYCHA’s developments, NYCHA’s inspections (including statistical sampling) have confirmed the presence of lead paint somewhere on the premises, and in at least 92 developments, the inspections (including statistical sampling) have confirmed the presence of lead paint inside apartment units. 
• • Since at least 2010, NYCHA has not performed most of the biennial lead paint risk assessment reevaluations required by regulation for developments containing lead paint. 
  •  
  • From at least 2012 to 2016, NYCHA failed to perform visual assessments of apartments for lead paint hazards as required by regulation.  In 2016, NYCHA began performing visual assessments in units where children under six reside, but NYCHA has not yet performed visual assessments in the majority of apartments that may contain lead paint. 
  •  
  • Since at least 2010, NYCHA has not ensured that staff use lead-safe work practices when performing work on surfaces that may contain lead paint.
• • Currently, after NYCHA has removed mold from apartments, the mold returns at least 30% of the time. 

• • In Winter 2017-2018 alone, more than 320,000 residents, 80% of the public housing population, lost heat.

• • In 2016 alone, NYCHA experienced an average of more than 13 outages per elevator.

• • NYCHA’s data reflects more than 260,000 work orders for roaches between 2013 and 2016.  For the same period, there were more than 90,000 mouse work orders and nearly 36,000 rat work orders.

• • For a decade, NYCHA provided its staff with a list of “Quick Fix Tips” to improve its Public Housing Assessment System inspection scores.
  •  

Mr. Berman thanked HUD, HUD OIG, and EPA for their invaluable assistance in this matter.  Mr. Berman also thanked Mark Peters and the Department of Investigation for their important wok in this area.

This case is being handled by the Office’s Environmental Protection Unit in the Civil Division.  Assistant United States Attorneys Robert William Yalen, Mónica P. Folch, Jacob Lillywhite, Talia Kraemer, and Sharanya Mohan are in charge of the case.

U.S. v. New York City Housing Authority Complaint 18 Civ. 5213 by Beverly Tran on Scribd

New York City Housing Authority Consent Agreement June 8, 2018 by Beverly Tran on Scribd

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