[Fraud Trends Series] Trend #7: Housing and Rental Assistance Fraud

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Front door with house keys with outside wiew

The Emergency Rental Assistance program was developed during the COVID-19 pandemic to help alleviate the fears of Americans facing rental debt, evictions, and the basic loss of housing security. The idea was to provide funding to assist households that were unable to pay rent or utilities through two programs. ERA1 and ERA2. ERA1 provides up to $25 billion under the Consolidated Appropriations Act of 2021, and ERA2 provides up to $21.55 billion under the American Rescue Plan Act of 2021. The funds are provided directly to states, U.S. territories, local governments, and Indigenous American tribes.

It only took about a year after the launch of ERA1 for the Treasury Department to update its website to include details on how to report fraud, waste, and abuse for ERA grantees and applicants. (That doesn’t surprise me as there are always plenty of nefarious individuals looking for ways to steal government benefits to make a quick buck.)

With nearly $47 billion in government benefits available, it’s no wonder that fraudsters are like kids in a candy store. (There are so many ways to carry out fraud regarding housing and rental assistance.)

Take, for instance, victim Dave Arcieri of Castro Valley, Calif. Although he owns his own home, he received a letter from the state addressed to “Xennia Hamilton,” who was supposedly renting his home. According to the letter, Arcieri had invited Hamilton to apply for the COVID-19 rent relief program. (Obviously, Arcieri was not a landlord, and Hamilton was not renting out his home.)

A ’fake landlord’ scam in Detroit, Mich., has impacted victims duped by con artists who sold or rented out houses they didn’t own. Imagine how June Walker, 65, felt after making the final payment on her house only to find an eviction notice in her mailbox two months later. (That’s when she found out that the house did not really belong to her, even though she had paid for it.) Walker had negotiated a lease with a purported property manager to pay a monthly payment that would go toward the purchase of her home. (It actually went into the pocket of the ‘so-called’ property manager.)

More recently, a Murrysville couple was arrested and charged with stealing $220,000 via a rental relief money-laundering scheme. ACTION Housing flagged a few fraudulent applications received from Devon Lane, 29, and Victoria Bennett, 36, for emergency rental assistance. Lane’s property management company, Lane Living Management LLC, submitted six applications tied to a property with only one certificate of occupation. Investigators also found the same unemployment assistance identifier used across a dozen different applications and claims for tenants who were not behind on rent. Surveillance video caught Lane and Bennett transferring the fraudulently received government money and spending it at Lowes, Walmart, and Macy’s. While Lane applied for more than $645,000 of relief-related funding, he received about a third, or $222,280, before the fraud was discovered.

Scammers will always take advantage of people during times of fear and uncertainty, making the COVID-19 pandemic their time to shine, unfortunately. There are many criminals who are willing to take this unfortunate opportunity to prey on victims by pretending they are someone they are not. To avoid becoming one of the unfortunate victims of housing and rental assistance fraud, consider these tips from the Consumer Financial Protection Bureau:

  • A government agency will not ask you for personal or financial information to process your rental assistance application. If you receive an email, text, call, or social media message from someone claiming to be the federal government, it’s probably a scam.
  • Local programs cannot charge a fee to process your application for emergency rental assistance. If you are asked to pay with cash, gift cards, wire transfers, cryptocurrency, or other similar forms of payment to get rental assistance, there’s a good chance it’s a scam.
  • Watch out for scammers who use official government logos or create fake websites that look real but aren’t. Be wary of emails or texts with a link to a government website. Visit the government or website directly, not through a link, to avoid any scams.
  • If you encounter a rental assistance scam, report it immediately to the Federal Trade Commission.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.