The U.S. Attorney’s Office announced on March 6 a $7,000 settlement with 44 Hawthorne, LLC and its owner, Alek Vienneau, to resolve allegations that they submitted false claims to the federal government after receiving impermissible excess rent payments from a low-income tenant while participating in a federal housing subsidy program.
The Department of Housing and Urban Development (HUD) provides federal funding through the Federal Housing Choice Voucher program, commonly referred to as “Section 8,” to assist low-income individuals in securing safe housing. The funding is provided through vouchers that are administered by local public housing agencies. The housing subsidy, which may cover all or a portion of a tenant’s monthly rent, is paid directly to the landlord. As a condition for receiving the housing subsidy, the landlord contractually agrees not to charge the Section 8 tenant rent in excess of the amount set by the public housing agency.
Despite this restriction, 44 Hawthorne, LLC and its owner, Alek Vienneau, allegedly collected excess rent from a Section 8 tenant for five months between June and November 2017. Denise Komnenus, the Section 8 tenant, first raised this allegation in a lawsuit filed against the defendants under the qui tam, or whistleblower, provisions of the False Claims Act.
“The Section 8 program provides crucial funding for low income individuals to afford safe housing,” said United States Attorney Andrew E. Lelling. “We will hold accountable landlords who benefit from the program and then take advantage of their tenants.”
“This settlement is the latest example of our continued commitment to hold landlords accountable for actions that seek to enrich themselves at the expense of our poorest neighbors,” said Special Agent in Charge Christina Scaringi, U.S. Department of Housing and Urban Development, Office of Inspector General.
The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The settlement agreement requires the defendants to pay $7,000 to the United States. Ms. Komnenus will receive approximately $1,540 of the recovery in this case.