County leaders, law enforcement, federal lawmakers react to newspaper investigation of CARES Act spending

Montgomery County officials say they are beefing up oversight of federally funded rental assistance programs after a Dayton Daily News investigation found money went to landlords of uninhabitable properties.

Meanwhile law enforcement officials and lawmakers say the newspaper’s findings are proof of the need for prevention and prosecution of misuse of pandemic relief funds.

The newspaper’s investigation found some of the largest payments last year from a Montgomery County rental assistance program went to properties that program administrators say appear to have violated program rules, including some that were uninhabitable and had no water service. Owners of 10 rental units offered to pay back more than $100,000 they received through the program after they were contacted by the Dayton Daily News.

Montgomery County Administrator Michael Colbert said the county is adding language to rental relief program applications and “building additional safeguards within the application process to include certifications and attestations regarding eligibility for the program.”

These and other restrictions — such as income limits — will apply to more than $8 million in rental assistance Montgomery County will start providing to residents this month through a new pandemic-relief program created by Congress in December.

Colbert said any audit or investigation into suspected program fraud last year will be submitted to the U.S. Department of Treasury once all CARES Act programs have closed out later this year.

“We cannot speculate on what the Treasury Department will do to fine/penalize those suspected of fraud. Those individuals who have voluntarily returned their CARES Act rental assistance checks will be identified to the Treasury Department as having done so,” he said.

Prosecutor: ‘I was repulsed’

Last year’s rental assistance program was funded by the federal CARES Act to help keep people in their homes during the pandemic.

“No doubt these benefit programs were designed to quickly get funds in the hands of those who need it most,” said Acting U.S. Attorney for the Southern District of Ohio Vipal Patel.

“No matter if a fraud scheme is easy or hard to perpetrate; a lie is a lie, and fraud is fraud,” he said. “You can expect enforcement efforts from all levels of government, local, state, and federal, particularly when federally funded programs are administered by state and local entities.”

Last month, a Dayton woman was sentenced to 24 months in prison for fraudulently obtaining more than $2.5 million from federal pandemic assistance programs for businesses. Federal prosecutors say she claimed to have more than 70 employees at her company, when in fact there were few or none.

A local man was charged Tuesday with receiving more than $120,000 in fraudulent pandemic relief funds by allegedly registering a new business last year to get money then using it for personal use.

FBI officials won’t say if they are investigating Montgomery County’s rental assistance program.

“While we cannot discuss specific investigations, the FBI is committed to working with our partners to investigate fraud related to the CARES Act and other federal programs,” said FBI spokesman Todd Lindgren. “It is important for these funds to be used as intended and that the laws regarding eligibility are followed.”

Montgomery County Prosecutor Mat Heck said his office has not been contacted by any investigatory agency about filing criminal charges related to the rental assistance program.

Asked about the newspaper’s findings, Heck said: “I was repulsed, but not surprised, as we prosecuted contractors for taking advantage of and defrauding victims of the tornado. Whenever money is involved, there are undeserving people who will try to get some for themselves.”

Brown, Portman react

Federal lawmakers touted the importance of the CARES Act to deliver desperately needed help to people impacted by the pandemic. But they said the Dayton Daily News’ findings reinforces the importance of oversight.

“We know that rental assistance has been an important tool for keeping Ohioans in their homes, as mentioned in the article. Any fraud of taxpayer dollars is unacceptable, and Sen. Brown is glad that thanks to the reporting of the Dayton Daily News, misused funds have been returned,” said a statement from the office of U.S. Sen. Sherrod Brown, D-Ohio.

“Sen. Brown will push for continued Congressional oversight of federal funding to protect Ohio taxpayers, and will push to ensure bad actors are held accountable so that their actions aren’t harming Ohioans who rely on this critical funding to prevent widespread evictions amid a once-in-a-lifetime pandemic.”

Emmalee Cioffi, spokeswoman for U.S. Sen. Rob Portman, R-Ohio, said actions taken by Congress last year helped millions of families and business and saved the economy from collapse.

“Both the executive branch, which implements and enforces these laws, and the Congress, which oversees this process, have a responsibility to ensure taxpayer dollars are spent wisely and clearly there is more that must be done to ensure that is happening,” she said.

About the Author