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HUD No. 97-61
Further Information:FOR RELEASE
In the Washington, DC area: 202/708-1420April 25, 1997
Or contact your local HUD office

Crack Down Bars Four Landlords -- Including One of the Nation's Largest Owners -- From Doing New Business with the Federal Government

WASHINGTON -- Stepping up efforts to crack down on landlords who cheat taxpayers and abuse federal assistance intended for housing low-income Americans safely and decently, HUD Secretary Andrew Cuomo moved today to bar three owners and one former manager from doing new business with the Federal Government.

The announcement is part of a nationwide "Get Tough" effort launched by The Department of Housing and Urban Development and The Department of Justice to step-up enforcement action against bad landlords. Earlier this month, HUD debarred 13 landlords, who pocketed $6.7 million in rents intended for mortgage payments.

"Today's actions send a clear signal to landlords that if you're getting rich at taxpayers' expense -- than we're getting tough on you," Cuomo said in describing debarment efforts against the four who received millions in federal housing assistance, but shirked their responsibilities to maintain safe, decent properties.

"HUD is not in the business of subsidizing landlords so they can live in the lap of luxury while their tenants live in slums," Cuomo said. "As of today, YOUR leases are up,"

The three landlords and one manager targeted for debarment ran properties in approximately 25 cities nationwide, housing more than 18,000 people, including children, elderly and working poor. Rampant misuse of funds and flat-out refusal to comply with housing regulations cited at a number of properties, led to HUD's decision to bar the apartment operators from any future dealings with the Department. In most cases, they will also be banned from future contracts with the Federal Government.

Among the landlords targeted for egregious practices is Allan Bird, whose expansive housing portfolio reaches communities in more than 20 cities nationwide. While Bird collects nearly $25 million in federal housing assistance each year for some 104 properties, 43 of those properties -- 41% -- failed either physical or financial inspections. Right now, more than 11,000 people are living in Mr. Bird's "troubled" properties.

Zachary Carter, U.S. Attorney for the Eastern District of New York recently obtained a court order ousting one of Bird's companies from Gates Avenue Housing Development, in Brooklyn. Inspections revealed serious security problems, widespread water damage and public areas that were filthy "with evidence of urine and human waste." The project was taken over by HUD just last week.

In underscoring his commitment to the Department's intensified efforts to stop bad landlords in their tracks Cuomo added, "It's time that landlords who feed off of taxpayers and prey on innocent Americans be put on the endangered species list."

Cuomo identified the following individuals and specific cases on which today's debarment decisions were grounded:

Landlord: Allan S. Bird; Carlsbad, California. Bird is involved in 104 project across the nation. Forty-three properties are on HUD's troubled list.
Properties Cited: 1)Gates Avenue Housing, Brooklyn, NY; 2) Fairview Green Apartments, Detroit, MI; 3) Amy Jo Manor, Mt. Morris, MI. Nearly 600 units.
Problem: Owner failed to maintain his HUD-assisted projects in compliance with Section 8 contract requirements while falsely certifying or causing to be certified that the properties were decent, safe, and sanitary.
Specific Problems with Properties: 1)water seepage through windows; structural damage to building; missing smoke detectors; broken firedoors; and elevators in dangerous condition. 2) cockroach and rodent infestation; inoperable/improperly placed smoke detectors; defective appliances; gas lines improperly capped; and missing locks and windows. 3) major plumbing problems; extensive exterior repairs, including driveways, walkways, and steps; porches lack proper support; buildings badly in need of painting; and appliances need to be repaired or replaced.
Enforcement Action: HUD is permanently barring this owner from doing business with the Department. He will also be prevented indefinitely from participating in procurement and non-procurement transactions as a participant, principal, or contractor with other parts of the Executive Branch of the Federal Government.

Cities where Bird owns a property on HUD troubled list: Brooklyn, NY; Mt. Morris and Detroit, MI; Nashville, TN; Marion, Galion, Dayton, Trotwood and Cleveland, OH; Birmingham, AL; Creston, IA; Columbia and Nashville, TN; Fort Myers and Ocala, FL; Chicago and Elgin, IL; Fort Wayne, IN; Americus, Moultrie, and Dublin, GA; West Haven, CT; Parsons and Coffeyville, KS; West Monroe, LA; Baltimore, MD; Salem, SD; Meadville, PA.

Contractor: Mr. Paul Olivier, Haddonfield, New Jersey
Property Cited: Rolling Green Estates/Sunset Terrace aka Hilltop, Syracuse, New York. 393 units, all of which receive Section 8 rental assistance.
Problem: Mr. Olivier served as Regional Property Manager for Interstate Realty Management, a property management company for HUD-insured and HUD-assisted properties. Mr. Olivier, along with another Interstate Realty Management employee, was indicted for falsely billing HUD for rental subsidies for vacant units that were being reported to HUD as occupied. Mr. Olivier was convicted on all 9 counts of the indictment.
Enforcement Action: The U.S. Attorney in the Northern District of New York obtained a criminal conviction against Mr. Olivier. HUD is suspending and indefinitely debarring Paul Olivier from participating in all HUD and other federal government programs. HUD is continuing its review of the actions of Interstate Realty Management.

Landlord: Douglas S. Wasserman, Cedarhurst, New York
Property Cited: Mott Haven VI, Bronx, New York. A 114-unit multifamily project in the Bronx, New York, with a HUD-insured mortgage of $3.1 million.
Problem: The owners failed to make necessary repairs to the property, allowing it to deteriorate to a deplorable condition. A HUD inspection found that the property was not maintained in a decent, safe and sanitary condition. In January 1997, the following conditions existed: missing windows, no front doors to the entrance of the buildings, a broken elevator, vermin infestation, and broken fire doors.
Enforcement Action: HUD is suspending and debarring owner for an indefinite period.

Landlord: Ms. Johnnie Benson, General Manager, Retirement Services Group; President, Colonial Southwest, Inc.; President, Retirement Village Management, Inc., Fort Worth, TX
Property Cited: Heritage Village Residential Care Facility, Ft, Worth, TX . The property (no longer in operation) was a 130 unit Residential Care Facility in Fort Worth, Texas, with a HUD insured mortgage of $6.5 million.
Problem: An investigation by HUD's Regional Office Inspector General determined that the owner disbursed $841,106 for questionable costs between February 9, 1988, and December 31, 1992, thus violating the Regulatory Agreement and other HUD requirements. The owner made unauthorized disbursements to herself and partners, including: paying her legal fees; making her loan repayment; and covering expenses on her other projects. The owner exercised total control over disbursements and ignored the requirements of the Regulatory Agreement and other applicable HUD guidelines limiting the use of project funds. Consequently, the owner defaulted on a $6.5 million dollar loan repayment.
Enforcement Action: HUD is debarring Ms. Johnnie Benson and her affiliates Retirement Services Group, Colonial Southwest, Inc., and Retirement Village Management, Inc., for an indefinite period.


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