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Report Fraud, Waste and Abuse
Date Published
August 04, 2021
News Type
Press Release
Link to Original
USAO, District of Nevada

LAS VEGAS, Nev. – A former regional director of community development for the National Community Stabilization Trust — formed in 2008 in response to the national mortgage-housing foreclosure crisis — was sentenced Tuesday to one year and one day in prison for conspiracy to commit bribery concerning programs receiving federal funds.

“The U. S. Department of Housing and Urban Development (HUD) entrusts non-profit organizations to administer HUD programs honestly and creatively to help improve the housing market. Their expertise is critical to stabilizing the nation’s housing economic recovery. When fraud is perpetrated against HUD, a significant impact is made on that recovery. One of the primary goals of the HUD Office of Inspector General (OIG) is to investigate fraud, waste, and abuse, and present findings to prosecutors; such findings aid in maintaining the integrity of HUD programs. Barajas’ actions violated that trust and he must now face the consequences,” stated Michael Gibson, Special Agent in Charge, HUD OIG, Los Angeles, California.

According to court documents, Sergio Barajas, 54, of Chino Hills, California, worked for the Trust as a regional representative over the western United States. His duties included helping the Trust and U.S. Department of Housing and Urban Development (HUD) non-profit organizations locate and buy foreclosed homes under a joint program between the Trust and HUD.

As part of the conspiracy:

  • Heartland Coalition agreed to pay Barajas for his influence to help Heartland Coalition participate in the program. From 2011 to late 2012, Heartland Coalition paid Barajas a total of $186,025 and purchased 626 houses in California, Nevada, and Arizona.
  • In 2011, Positive Housing Equations LLC agreed to pay Barajas for his influence to provide its affiliate company, Alliance Revitalization Communities (ARC), with access to houses available through the program. Between 2011 and 2014, ARC bought 167 houses, and Positive Housing Equations LLC paid Barajas a total of approximately $158,000.
  • In 2013 and 2014, a real estate agent in Arizona agreed to pay Barajas for each house that her client bought through the Trust. The real estate agent paid Barajas a total of $36,711 to Barajas for at least 32 properties.

Barajas pleaded guilty in March 2021 to one count of conspiracy to commit bribery concerning programs receiving federal funds. In addition to the term of imprisonment, U.S. District Judge Richard F. Boulware II sentenced Barajas to three years of supervised release.

Acting U.S. Attorney Christopher Chiou for the District of Nevada and Special Agent in Charge Michael Gibson of HUD OIG, Los Angeles, California, made the announcement.

This case was investigated by HUD OIG. Assistant U.S. Attorney Daniel Schiess prosecuted the case.

To submit allegations of fraud, waste, abuse, mismanagement or whistleblower related matters within HUD and HUD-funded programs to the OIG, the public can either call the HUD OIG Hotline number at 1-800-347-3735 or make an online report at https://www.hudoig.gov/hotline/report-fraud.