HUD May Demand $7M Repayment From Mass. Housing Authority

13183_embezzle HUD May Demand $7M Repayment From Mass. Housing Authority The U.S. Department of Housing and Urban Development (HUD) may demand that a municipal Massachusetts housing authority return $7 million in grants that were obtained through false reports and later diverted to non-housing pursuits.

The Boston Globe reports that the Chelsea Housing Authority has been the subject of a HUD investigation on the misuse of funds that were designated to pay for the modernization of low-income apartments between 2002 and 2009. However, the funds were diverted by the authority's former director, Michael E. McLaughlin, who resigned in late 2011 and was charged last week federal authorities with four felony counts of deliberately concealing his full salary from regulators.

Albert Ewing, who succeeded McLaughlin as housing chief, is warning that his agency is not in the position to raise $7 million for reimbursement purposes. However, the agency is considering filing legal claims against McLaughlin and the accounting and auditing services companies that worked with the agency during McLaughlin's tenure in order to ‘seek recovery of damages and penalties for professional malpractice by these individuals.’


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