CONNECTICUT LANDLORD AGREES TO PAY GOVERNMENT $400,000 UNDER CRACKDOWN BY HUD AND JUSTICE DEPARTMENT

Jon Kerr signed a consent judgment in U.S. District Court in Connecticut agreeing to the $400,000 payment involving the 176-unit Briarwood Hill apartment complex in New Haven, CT. The consent judgment also bars Kerr from working as a contractor or doing other business with federal agencies for three years.

"This is the latest in series of actions we're taking at HUD to stop people from abusing our programs," Cuomo said. "Waste, fraud and abuse are an ugly part of HUD's past that have no place in our present and future."

"Today's announcement reflects the coordination and teamwork that exists between HUD, the Justice Department and U.S. Attorneys' offices as we work together to ensure the highest standards of integrity in HUD programs and to protect taxpayer dollars," Cuomo said.

U.S. Attorney for Connecticut John Durham filed civil charges against Kerr on behalf of HUD, accusing Kerr and his company of violating HUD regulatory requirements in several ways, including: failing to establish and adequately fund the security deposit fund; and incurring expenses not reasonably related to the maintenance of the project.

A HUD investigation determined that about $294,000 in unauthorized spending was made from the apartment complex accounts, and concluded that $105,000 was improperly removed from the security deposit account.

HUD has a standard regulatory agreement with all recipients of federal housing funds that requires HUD to review spending by the recipients.

Kerr and Briarwood Associates purchased the apartments from the Federal Deposit Insurance Corporation in March of 1993. HUD provided the mortgage insurance that enabled Kerr and Briarwood Associates to secure the $6.08 million mortgage used for the purchase.

In March, Attorney General Janet Reno and Cuomo began a "Get Tough" campaign to crack-down on waste, fraud and abuse in federal housing programs. To date, the campaign has taken enforcement actions against landlords and contractors across the country for fraudulent and wasteful practices involving federal funds, including:

• An increase in HUD's regulatory enforcement actions against bad landlords by 400 percent compared with last year.

• The collection of more than $5 million in fines and awards from bad landlords.

• A crackdown on crime and drugs in public housing, resulting in over 1,400 arrests in six months.

• The creation of a new Enforcement Center, headed by FBI Special Agent Edward Kraus.

• A doubling of enforcement actions taken against officials responsible for administering programs in public housing.