Housing voucher scam probed

Housing officials are investigating the illegal sale of housing vouchers in Boston's poor neighborhoods, where they say two groups lured victims with promises of a fast-track for federal subsidies worth thousands in rent and utilities.

Boston Housing Authority officials say the two groups -- one involving three men, another run by two women -- peddled copies of vouchers for the federally funded Section 8 program or promised that they could get the documents. The groups sold the forms for as much as $2,000 and said the documents would allow individuals to skip the long waits and bureacratic hassles usually required to receive federal housing subsidies, the officials said.

"These folks are taking advantage of people in desperate situations," said Marilyn O'Sullivan, who runs the housing program for the BHA. "They need housing; they are low income. It's just the lowest form of a scam that I can think of."

Section 8 vouchers provide poor families with an average of $1,020 per month for rent and utilities. After navigating the bureacracy required for approval, applicants must then get on a waiting list of thousands who are in line for vouchers ahead of them, in a process that can take months, even years.

The BHA stopped issuing new vouchers in May 2004, but opened its waiting list for two weeks in October when more federal housing money became available. About 7,000 people joined the waiting list, and the agency has issued about 200 vouchers since January and plans to provide at least 1,000 more by the end of this year.

With so few new vouchers coming available, the system has become ripe for abuse, housing officials said.

"The list is only open for a certain time, and unless you're top priority, you might not get on the list," O'Sullivan said. "People out there are struggling. And they think this is a fast, easy way to get a voucher."

In one of the instances being investigated, authorities believe a woman who previously qualified for Section 8 subsidies made photocopies of her voucher and used correction fluid to blank out her name. She and another woman sold the document to at least five people for amounts ranging from $400 to $1,600, O'Sullivan said. One man bought the document and was told that a Housing Authority inspector would come to his apartment to determine how much of a subsidy he would be offered.

"After 10 days, nobody showed up," said the man, who declined to be named for fear of retribution from the women, who have his personal information along with $400 of his money. He came forward to Boston housing officials on Monday.

In another instance, a man told BHA officials that he was approached on Blue Hill Avenue in Dorchester and asked if he wanted to buy a voucher, officials said. The man filled out an application for a housing voucher and, during a series of phone calls, handed over personal details including his address, birth date, and Social Security number. He paid $2,000.

He was told by the man to meet him at a corner outside the offices of the BHA, where someone would meet him with his voucher. When he arrived, four others were already there, saying they were waiting for vouchers. Realizing they had been duped, they reported the incident to Housing Authority officials.

Boston officials have provided information to the inspector general's office of the US Department of Housing and Urban Development, where officials declined to comment on whether they have launched a formal investigation.

"I can't confirm or deny any investigation," said Peter Emerzian, special agent in charge of the inspector general's office. "But in general practice, if someone were to refer those cases, we would investigate them and take them seriously."

There are about 73,000 vouchers statewide, nearly 12,000 of which are granted by the BHA. The vouchers are provided to those in dire need, such as survivors of domestic abuse, people who are homeless, or families who have lost their home in a fire. Residents who meet the criteria pay about a third of their monthly income to landlords who have registered with the program, and federal funds pay the rest.

Scams are not new in the federal program.

In March, a property manager at Peabody Property in Boston was sentenced to two years in prison for selling housing vouchers in three buildings she oversaw for between $4,500 and $6,000 apiece.

A former Section 8 manager for the Avon Housing Authority was sentenced last year to nearly six years in prison for falsifying records and fraudulently taking money from low-income applicants.

Matt Viser can be reached at maviser@globe.com.