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REAL ESTATE FIRM PRESIDENT PLEADS GUILTY IN $1.4 MILLION FRAUD CASE INVOLVING DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today said the former president of a Tacoma, WA real estate investment company has pleaded guilty to federal mail and tax fraud charges in connection with a scheme to fraudulently obtain more than $1.4 million in HUD-insured property improvement loans.
As part of the plea agreement, Rusty Fields - former president of Optimum Investments, Inc. - admitted that between December 1992 and December 1995 he falsified numerous HUD home improvement loans, lease agreements, contractor bids, and appraisals. He also admitted preparing a false tax return for one of his many strawbuyers. He is scheduled to be sentenced later this month and faces a maximum of 8 years in prison, $500,000 in fines, and restitution to HUD.
"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. We have zero tolerance for waste, fraud, and abuse."
This investigation, was conducted by HUD's Office of Inspector General, the Internal Revenue Service Criminal Investigation Division, and the U.S. Attorney's Office. It was part of the white collar crime focus of the Operation Safe Home initiative that was created in 1994 to attack crime in public and assisted housing.
In addition to combating fraud in publicly funded housing, Safe Home has been responsible for executing more than 1,900 search warrants and making more than 15,600 arrests. Operation Safe Home has seized more than $29 million worth of illegal drugs, more than 2,100 weapons, and over $4.6 million in drug money.
Under this initiative HUD works along with the Justice Department, Treasury Department and the Office of National Drug Control Policy in cooperation with state and local law enforcement agencies and public housing authorities.
In addition, Cuomo launched a "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:
Content Archived: January 20, 2009