Deborah and Lawrence Conrads faced allegations that they defrauded the Department of Housing and Urban Development Housing Choice Voucher Program during a 13-year period.
The voucher program provides low-income families, the elderly and the disabled with assistance to afford housing in the private market. Housing choice vouchers are funded by HUD and administered locally by public housing authorities.
When a landlord agrees to participate in the Housing Choice Voucher Program, the landlord benefits by receiving housing assistance payments directly from the public housing authority each month to cover a substantial portion of the rent of a unit. In exchange, the landlord agrees, among other things, that the public housing authority will determine the maximum rent for the unit and that the landlord will not receive any payments from the family for rental of the unit other than the family’s portion of the rent authorized by the public housing authority.
In 2001, the Conrads entered into such a housing assistance payment contract with the Housing Authority of the County of Montezuma for one of the Conrads’ rental units in Cortez.
According to the release, the United States contended that despite the terms of that agreement, as recently as 2014 the Conrads knowingly charged the tenant family additional unauthorized rent and didn’t reveal the side payments from the public housing authority. In one instance, when the housing authority denied the Conrads’ request for a rent increase, the Conrads nonetheless entered into a lease extension that increased the rent paid by the family.
In an emailed response to The Journal, Deborah Conrads said that neither she nor her husband intended to commit fraud.
“It has always been the intention of (Lawrence) and myself to provide clean, safe homes at the most affordable rent possible,” she said.
Conrads said Lawrence had presented the Housing Authority with a copy of the lease, thinking it was a routine interview.
“We obviously did not think there was anything wrong with the lease, or that we had anything to hide, or he wouldn’t have walked in with the lease for them to copy,” Conrads said.
She contends that the rent they charged was under the fair market rent rate determined by the housing authority, but they failed to file the correct paperwork when they increased the rent amount.
“As it turns out, it appears that we had raised the tenant’s rent without filing the correct form with HA,” she said. “That apparently is, in the government’s eyes, fraud.”
Conrads said she appreciated the work of the justice department and the housing authority office, and she recommended that property owners read contracts and understand how government agencies work in order to abide by their rules. After the investigation, Conrads said, the Montezuma County Housing Authority in 2014 developed a list of important information that landlords need to know before entering into such contracts.
“We have always tried to be honorable citizens in our community and so for any misunderstandings or mistakes that resulted in allegations of fraud, I sincerely apologize to my community and church family,” she said. “As a follower of Jesus Christ I want to be above reproach and therefore I am thankful that this issue of “fraud” has been brought to my attention so that the penalty can be paid and I can start with a clean slate.”
She emphasized that neither she nor her husband was charged with a crime.
According to the release from Troyer’s office, the Conrads further increased the rent they were charging the family in subsequent lease extensions. They did not seek approval from the Montezuma Housing Authority for the later increases and did not provide the housing authority with copies of any lease extension, the release states.
The United States alleges that through this scheme, the Conrads extracted at least $18,000 in excess rent from the family, and at the same time the Conrads were cashing housing assistance payments they received from federal funds as Housing Choice Voucher Program landlords, according to the release.
“When landlords take advantage of the Section 8 program by charging low-income families excessive rent, they undermine HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all,” Troyer said in the release. “Landlords who defraud HUD face stiff civil penalties.”
The claims settled by this agreement are allegations only. By entering into a civil settlement, the Conrads did not admit liability.