CUOMO CONTINUES CRACKDOWN ON WASTE, FRAUD AND ABUSE IN ACTION AGAINST FIVE PEOPLE IN TROY, NEW YORK

ASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today announced that HUD has blocked five men from doing business with the federal government, following their convictions on criminal charges involving a scheme to defraud the Troy, NY Housing Authority.

Four of the men, who have been barred by HUD from receiving federal contracts for three years, are not challenging their debarments. The fifth has been suspended while he appeals his two-year debarment.

All five have been convicted in U.S. District Court for the Northern District of New York on criminal charges for their involvement in skimming funds and/or property from the Troy Housing Authority.

"HUD's days as a mugging victim are over," Cuomo said. "Anyone who tries to rip off this Department will be caught and punished to the full extent the law allows."

Cuomo said HUD has issued three-year debarments against:

• J. Robert Hayes, former Executive Secretary of the Troy Housing Authority. Hayes was convicted of theft of government property, after he was accused of taking supplies owned by the Housing Authority. He received a two-month sentence, a fine of $11,400, and was ordered to pay restitution of $4,635.
• Donald Gregware, a former maintenance supervisor at the Troy Housing Authority. Gregware was convicted of theft from a program receiving federal funds, after he was accused of soliciting bribes from individuals attempting to do business with the Housing Authority. He received a 15-month sentence and was ordered to pay restitution of $49,000.
• James A. McCarthy and William French, former contractors for the Housing Authority. The two were also convicted of theft from a program receiving federal funds. They were accused of offering bribes to housing authority representatives in return for favors in business transactions. McCarthy received five-years probation and a $15,000 fine. French received five years probation and was ordered to pay restitution of $10,000.

Cuomo launched the "Get Tough" Initiative to crack down on waste, fraud, and abuse in HUD programs in March 1997 in partnership with the Justice Department.

A recent report on HUD's Get Tough Initiative found that:

• HUD dramatically increased the number of debarment actions against bad landlords to 122 in 1997 - an increase of over 300 percent from 1996, when just 30 landlords were subject to debarment action.
• HUD and the Justice Department worked with the HUD Inspector General's Office, the Treasury Department, and state and local governments to nearly double the number of civil case and settlements resulting in recoveries against landlords of HUD-assisted housing last year. The number of such cases grew to 46 in 1997 - up from 24 in 1996.
• HUD and the Justice Department recovered nearly $25 million in money owed to HUD by landlords as a result of the above actions in 1997 - up from about $18 million the year before.