PHILADELPHIA – Landlord Allan R. Posner and his property management company ILJOR Properties, LLC, have agreed to pay $570,000 to resolve allegations that they violated the False Claims Act during their participation in the U.S. Department of Housing and Urban Development’s Housing Choice Voucher Program (HCVP), commonly known as “Section 8.”
The HCVP is the federal government’s primary program for helping low-income families, the elderly, and disabled people to afford decent, safe, and sanitary housing in the private market. As conditions of participation in the HCVP, landlords must regularly certify that the rents they charge to tenants who receive housing assistance vouchers (“assisted tenants”) are not higher than those paid by unassisted tenants residing in comparable properties, and must certify that they are not charging any additional amounts to assisted tenants other than charges specified in each housing assistance payment contract.
The United States contends that, during the period from January 1, 2017, through December 31, 2020, ILJOR regularly charged Section 8 tenants more than unassisted tenants in comparable properties. These overcharges arose, in part, from Posner’s engagement in a prohibited quid pro quo sexual relationship with an unassisted tenant in which he made an unwelcome proposal to lower that tenant’s monthly rental payments in exchange for sex. The individual acquiesced because she was afraid of losing her housing. Then, Posner regularly lowered her rent in exchange for sexual acts. In doing so, Posner overcharged the Section 8 tenants whose rent was higher than this unassisted tenant, whose rent was regularly reduced.
“Quid pro quo harassment, where a landlord requires a person to submit to an unwelcome sexual request in exchange for housing, is illegal. Here, where the landlord lowered the rent of an unassisted tenant in exchange for sex, he also falsely certified to the government that Section 8 tenants and HUD were not being charged more than unassisted tenants in comparable units,” said Jacqueline C. Romero, United States Attorney for the Eastern District of Pennsylvania. “This office will continue to investigate landlords who take advantage of tenants and who overcharge the government under the Section 8 program.”
ILJOR also charged assisted tenants additional fees that exceeded the fees paid by unassisted tenants, and that were not specified in the housing assistance payment contracts, including excess fees for storage space, garage access, and laundry.
In one circumstance, the housing authority determined that a tenant, JS, could only afford to pay $4 a month toward her rent. Posner agreed in the Section 8 contract with the housing authority that the tenant would have no additional charges, other than electric services, aside from the agreed-upon rent. But in the lease for this unit, Posner charged JS $25 a month for a storage locker. Posner later threatened to evict JS when she could not make a $30 payment for rent of her apartment and the storage locker. In another instance, Posner charged assisted tenant LR, someone with an amputation who used a wheelchair for mobility, $125 a month for a storage unit located down a flight of stairs in the basement. This additional fee was not included in the housing assistance payment contract Posner entered into with the housing authority, as required. From January 1, 2017, to December 1, 2020, Posner received over $38,000 in fees he was not allowed to receive from HCVP-assisted tenants.
“Exploiting vulnerable individuals through sexual misconduct or overcharging HUD-assisted tenants is both reprehensible and abusive,” said Inspector General Rae Oliver Davis with the U.S. Department of Housing and Urban Development. “We will continue to partner with the United States Attorney to hold these landlords accountable, protect low-income households from sexual and financial predation, and promote the integrity of HUD programs.”
The U.S. Attorney’s Office and HUD’s Office of Inspector General invite participants in HUD’s Section 8 program who have experienced sexual harassment by a landlord or a landlord requesting extra money from them to call the HUD OIG hotline at 1-800-347-3735.
This matter was investigated by the U.S. Department of Housing and Urban Development Office of Inspector General and Assistant U.S. Attorney Erin Lindgren.