| HUD No. 06-053
May 19, 2006
HUD MOVES TO SANCTION TWO FORMER MANAGERS OF A NORTH CAROLINA HOUSING AUTHORITY FOR MISUSE OF FEDERAL FUND
Durham Housing Authority Officials Accused of Violating HUD Requirements
WASHINGTON - The Department of Housing and Urban Development today proposed a three-year debarment of two former managers of the Housing Authority of the City of Durham, N.C. (DHA). The pair is accused of using federal public housing funds for the development and operation of a nonprofit affiliate of the DHA, without HUD approval.
The proposed debarment of James Tabron Jr. and Frank Meachem, if affirmed, would prohibit their participation in federal programs during the three-year debarment period.
"Managers of public housing authorities are expected to act responsibly with HUD resources," said Assistant Secretary Orlando Cabrera, who heads up HUD's Office of Public and Indian Housing. "These two men acted irresponsibly and without regard to the harmful effect their actions have on low-income families who benefit from federal funding."
Tabron was executive director of DHA from 1980 to 2003 and Meachem was the agency's interim executive director from 2003 until 2005. Tabron and Meachem, both of Durham, also served as secretary/treasurer of Development Ventures, Inc. (DVI), a nonprofit affiliate of the DHA, while holding their management positions for DHA. The proposed debarments are based on their violations of HUD requirements in their respective duties when employed at DHA.
While under the leadership of Tabron and Meachem, the DHA violated Part Two of Section 401(D) of the Annual Contributions Contract (ACC), the contract between HUD and local public housing authorities. They violated the ACC by using federal public housing funds from DHA's general funds account for the development and operation of DVI properties without HUD approval. Unless HUD grants advance permission, funds in this account must be used for DHA properties only. During the period from 2001 to 2003, improper advances from this account totaled $1,967,798, with Tabron advancing $1,156,945 and Meachem advancing $810,853.
Meachem's proposed debarment is also based on DHA violating the Turnkey III (Homeownership Program) Administrative Use Agreement between DHA and HUD when it used proceeds from the sale of Northtowne Apartments - a DVI property - for purposes not allowed under the agreement.
Tabron and Meachem have 30 days to contest the proposed debarment. If they fail to respond to the notice within the 30-day period, the debarment will be affirmed.
HUD's Office of Public and Indian Housing (PIH) is responsible for managing and administering a range of programs, including the two largest federal rental assistance programs - public housing and the Housing Choice Voucher Program, formerly known as Section 8. Combined the programs serve more than 3.2 million low-income families in the U.S. PIH also monitors the operations of the nation's approximately 3,400 public housing authorities that manage the country's more than 1.2 million public housing units and administer other HUD programs.
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