EMBEZZLEMENT AND THEFT: In several HUD programs, administrators and participants may be entrusted with cash or assets and take them for their personal use. There are many ways they may embezzle, from simply taking money from the cash drawer or writing checks to cash, to more elaborate methods to conceal the theft, like falsifying invoices and misusing credit cards of the HUD funded organization.
CONTRACTING AND PROCUREMENT FRAUD: There are a variety of fraudulent activities in these categories that can involve procurement officials and bidders working alone or in collusion to commit frauds including:
- A false certification of regulatory and statutory compliance, or qualifications necessary to obtain a contract
- Colluding with others to win a contract using bid rigging, phantom or altered bids, or split bids
- Falsifying information on contract proposals
- Using Federal funds to purchase items that are not for Government use
- Billing more than one contract for the same work
- Billing for expenses not incurred as part of the contract
- Billing for work that was never performed
- Falsifying data such as employee credentials, experience, and rates, false or defective bonds, and test or inspection results
- Change order abuses; Underbidding to win contract and colluding with procurement officer to make up profits through unnecessary change orders
- Substituting approved materials with unauthorized products
- Misrepresenting a project’s status to continue receiving Government funds
- Charging higher rates than those stated or negotiated for in the bid or contract
BRIBERY AND KICKBACKS: Bidders offering contract officials money or other items of value to award a grant (bribery) or contract officials requiring funds or items of value from bidders to obtain a contract (kickbacks).
CONFLICTS OF INTEREST: Persons in positions of trust that use their authority to steer contracts or program benefits to their own undisclosed businesses, family, or business associates.
IDENTITY THEFT: Program administrators and others who steal identities or create false identities to apply for and illegally receive various HUD funded benefits such as rental assistance, mortgages, or block grant program funds.
SOCIAL MEDIA SCAMS: Programs have seen various scams in which websites and other social media sites are used to induce the public to send money in order to receive various HUD benefits, grants, or contracts. They sometimes falsely advertise as being government representatives or agents of HUD to promote their scheme further.
The devastating and tragic wildfires on Hawaii’s Maui, like many natural disasters, have caused hardship conditions that leave individual, businesses, and communities vulnerable to bad actors who take advantage of those impacted by these severe weather emergencies.
Homeowners who experience a temporary or permanent loss of income due to a natural disaster or an increase in expenses post-disaster may be financially vulnerable, making it difficult for them to make mortgage payments. Unfortunately, scammers rely on this vulnerability and attempt to exploit homeowners in disaster-stricken areas.
Be on the lookout for fraudsters who may try to take advantage of quick timeframes and difficult circumstances that individuals and communities face following a disaster.
The urgency in post disaster recoveries often leads State and local officials to work to quickly restore infrastructure and public services and help make repairs. Such urgency can sometimes result in cutting corners with CDBG program requirements. However, grantees and subrecipients that do not follow all CDBG program requirements may be forced to repay Federal funds.