PHILADELPHIA – United States Attorney Jacqueline C. Romero announced today that a local property owner will pay $90,458 to settle allegations that he violated the False Claims Act by charging a low-income tenant more than the amount permitted under the property owner’s agreement with the government under the Housing Choice Voucher Program (Section 8).

The government alleges that under the Housing Choice Voucher Program, David Krmpotich of Montgomery County was permitted to charge rent in an amount agreed upon by Krmpotich, the tenant, and a public housing agency administering the rent subsidy program. Under the program rules and the parties’ lease, the tenant was required to pay Krmpotich rent equal to a portion of the tenant’s income, and the federal government was required to pay the balance of the agreed total rent. Krmpotich was prohibited from charging the tenant more than the tenant’s allocation of the total rent amount. Nevertheless, the government alleges Krmpotich demanded that the tenant pay an additional $125.00 to $185.00 per month in unlawful and undisclosed supplemental rent payments.

United States Attorney Romero stated, “A deal is a deal. Property owners receiving rent subsidies from government’s coffers must live with the deal they agree to and not secretly and illegally demand more from tenants, whether money or anything else of value. The conduct alleged here is an affront to the integrity of the Housing Choice Voucher Program – a program designed to promote safe and affordable housing for low-income tenants – and to the taxpayers who pay for the program. My office is committed to bring accountability to those who break the rules.”

“This settlement represents our commitment to protecting HUD beneficiaries from bad actors seeking to enrich themselves by preying on HUD-housing participants,” said Special Agent in Charge Shawn Rice of the U.S. Department of Housing and Urban Development, Office of Inspector General. “HUD OIG will continue to pursue and bring to justice landlords who fraudulently overcharge HUD-assisted tenants in violation of Federal law.”

The allegations against Krmpotich were brought to the attention of the United States by a whistleblower. The False Claims Act provides for whistleblowers to receive a portion of the amount recovered because of their disclosures. In this case, the whistleblower will receive $16,282 of the settlement proceeds. 

The government’s investigation was led by Assistant United States Attorney Joel M. Sweet, Investigator Jeffrey Braun, and investigators from HUD OIG. The whistleblower lawsuit is captioned United States ex rel. Catherine Spearman Jackson v. David Krmpotich, No. 22-cv-1613 (E.D. Pa.). 

The claims asserted by the United States are allegations only and there has been no determination of liability.

Updated September 28, 2023