Not Exactly Home Sweet Home

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The Housing Authority of Baltimore City runs a federally-funded voucher program for Section 8 housing that helps low-income families, the elderly and the disabled afford decent, safe housing in the private market. One of the 3,000 landlords participating in the locally administered rental assistance program decided he wasn’t making enough money from rent proceeds and decided to take more than his fair share from the Baltimore Housing Authority – nearly $1.4 million. (That’s a pretty good profit in light of the fact he only had one tenant.)

The story actually began in 2009, when the fraudster obtained bank account information for the housing authority. The landlord, along with three accomplices, ran a pretty complicated scheme that transferred money directly out of the Authority’s bank account. (It’s despicable that they lined their pockets with funds that were designated for helping people in need.) In early 2010, the fraudster did a few test runs and made several unauthorized electronic transfers from the Housing Authority’s bank account into the landlord’s bank account. When questioned by Housing Authority officials, the landlord denied that he did anything wrong and actually paid back $1,400 to the Housing Authority. (I smell a rat.)

During 2010, the landlord and his accomplices managed to acquire a fraudulent Maryland driver’s license, open a fake contracting company and funnel Housing Authority funds into the contracting company’s bank account. Those funds were then transferred to other bank accounts and withdrawn in cash through personal visits or via automated teller machines. They even transferred funds to debit cards in the names of other individuals using personal identification information without their permission. When the landlord was contacted by an FBI agent regarding several of the debit cards – he was the point of contact listed – he deleted the contents of two of the email accounts linked to the debit cards.

The fraudster is looking at a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy. He also faces a mandatory two years in prison, consecutive to any other sentence for aggravated identity theft and 20 years in prison for one count each of attempting to tamper with evidence and for evidence tampering. The three accomplices all pleaded guilty to their part in the scam. Two were sentenced to 41 months and 36 months in prison, respectively, each ordered to pay restitution of $1,399,700. The third partner in crime will be sentenced later this year.

This case is an example of how serious the government takes fraud. In 2009, the Financial Fraud Enforcement Task Force was established to improve the efforts across federal, state and local partners to investigate and prosecute significant financial crimes while ensuring just and effective punishment and recovering victims’ proceeds. Greed caused this landlord to steal from the less fortunate to make his life more comfortable. This selfish man will relinquish his job as landlord and become one of government’s tenants at his new ”Home Sweet Home” in prison.

Source: Today’s ”Fraud of the Day” is based on an article titled ”Upper Marlboro Man Convicted in $1.4 M Fraud Case” published in The Upper Marlboro Patch on July 23, 2013.

UPPER MARLBORO – Daren Kareem Gadsen, an Upper Marlboro resident, was convicted for running a complicated fraud which saw him steal almost $1.4 million from the Baltimore Housing Authority, according to The Baltimore Sun.

Gadsen, who went by the alias “D”, hatched the scheme while he was a landlord who participated in Baltimore’s Housing Choice Voucher Program, more commonly known as Section 8 housing.

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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.