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Report Fraud, Waste and Abuse
Date Published
April 08, 2015
News Type
Press Release
Link to Original
USAO District of Massachusetts

BOSTON – A former executive of the Chelsea Housing Authority (CHA) and a former public housing inspector were convicted on Wednesday, April 1, 2015, for their roles in rigging the inspection process of federally funded housing units.

James Fitzpatrick, 63, of Acton, Mass., and Bernard Morosco, 50, of Utica, NY, were convicted of conspiring to defraud the United States and the U.S. Department of Housing and Urban Development (HUD) by impairing, impeding, and defeating the proper operation of HUD’s physical condition assessment.

Pursuant to federal regulations, to determine whether a public housing authority is meeting the standard for its residents of conditions that are “decent, safe, sanitary, and in good repair,” HUD’s Real Estate Assessment Center (REAC) is required to “provide for an independent physical inspection of a public housing authority’s property or properties that includes, at a minimum, a statistically valid sample of the units in the CHA’s public housing portfolio to determine the extent of compliance with the standard.”  REAC inspections are conducted by independent contractors who have received training from REAC on the inspection protocol and applicable regulations, and have been certified by HUD.  Once certified, an inspector is given an inspector number, and with a password, can access the secure REAC server, which contains data on all public housing authorities and also later enable the inspector to generate a random sample of units to inspect on the scheduled date of the inspection.

Before the REAC inspections of the CHA in 2007, 2009, and 2011, Morosco gave Fitzpatrick, the Assistant Director of the CHA, an advance list that revealed which units at the CHA would be inspected.  During those years, Morosco, who was a REAC-certified inspector, worked for the CHA as a consultant, advising the CHA about how to get better scores on its REAC inspections.

One or two months before each REAC inspection, using information provided by Fitzpatrick, Morosco accessed HUD’s secure database and downloaded information...