The Department of Housing and Urban Development (HUD) is investigating whether Colorado providers helped nearly 3,000 people swindle taxpayer money from Uncle Sam, The Post has learned.
The investigation comes after an internal HUD audit found that benefits were granted to 221 dead people, while another 87 were otherwise ineligible.
The department also said that another 2,519 beneficiaries will need to undergo additional verification.
“From deceased tenants to individuals receiving HUD housing benefits who were never supposed to, the Department has questions for HUD-supported housing providers in Colorado, and we expect prompt answers and enforcement action,” a HUD spokesperson told The Post.
The apparent fraud took place in most of the Rocky Mountain State’s 59 public housing agencies (PHAs) and was particularly pronounced in the Denver Housing Authority, a source said.
HUD officials are set to demand PHAs perform additional verification of beneficiaries and remove both deceased tenants and ineligible beneficiaries from their rolls.
Housing providers will also be required to reimburse federal funds that went to ineligible individuals and face additional sanctions if they fail to comply.
Colorado’s PHAs oversee 38,000 leased units, either in public housing or covered by housing choice vouchers. HUD provides some $440 million in federal money to the state.
Typically, tenants are expected to contribute about 30% of their income to receive housing assistance.
HUD has also been scrutinizing other states.
Earlier this week, the Washington Examiner reported that the department plans to dispatch investigators to Minneapolis and St. Paul, Minn., to assess the state of housing programs there.
While the Minneapolis Public Housing Authority spends about $108 million a year on housing assistance, St. Paul only spends $46 million.
HUD’s plans to send staff to Minnesota comes against the backdrop of the $1 billion Feeding Our Future fraud scandal that has roiled the state and follows Immigration and Customs Enforcement (ICE) operations focused on the Twin Cities.
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