Owner of local property management agency faces federal fraud charges for misappropriation of CARES Act funding

A Dayton-area landlord is facing federal fraud charges following an investigation into how CARES ACT 2020 rental assistance was spent. The money was meant to provide relief to tenants facing eviction during the pandemic. Josh Sweigart of the Dayton Daily News is the investigative reporter who began investigating possible embezzlement. He tells WYSO’s Jerry Kenney about his reporting that started a year ago.

Josh Sweigart: It started last year. We wanted to make sure we were keeping track of where all the CARES Act money was going. So we filed for registration with Montgomery County, which received over $90 million in CARES Act funds, basically about who got all that money. And the first survey we did on rent assistance, we noticed that there was a pretty high amount of rent being paid in some neighborhoods where you wouldn’t expect, at least in Dayton, Ohio, that the rent is so expensive and when I looked at the properties I realized they were doomed. So that caught our attention, and I ended up going out into the community and going to many of the properties that had this rent assistance, only to find that they were closed, the electricity was out, several d ‘between them were on the list of properties to be demolished, and they were literally condemned houses with no one inside.

So that was the first report we made was that there were a number of these properties that had received rental assistance even though there was no one living there and legally no one shouldn’t live there. During this report, some of those owners actually refunded the money to the county. After this story was published, we received a tip to deepen the owner who received the largest amount of money, which was Freedom for Living Properties. We did this and went door to door to properties that had received this funding and the tenants who lived there told us they were unaware of any housing assistance their landlord had received , so these are people some of whom were facing eviction, some of whom said they were struggling to make ends meet to pay their rent. And it would appear that their landlord was receiving money on their behalf from the county and would not have passed the benefit on to them.

Some of these people belonged to section 8 and paid part of their rent and section 8 paid the rest. So they’re legally obligated to pay their rent, and Section 8 coverage also covers their rent, which has raised questions: “Well, hey, if this landlord gets $1,000 a month for eight months for this property where the housing authority and the tenant was paying the rent for that property so was it, were they overpaid?” So we visited dozens of properties, and this report came out last year raising questions about those This sparked an FBI investigation into our findings, which recently led to criminal charges against the owner of the business, an individual named Antoine Draines.

Jerry Kenney: As you mentioned, you’ve been keeping tabs on where some of the CARES Act funding is going. This scenario is really not hard to imagine considering the speed with which the funding was disbursed. Employment and Family Services have also faced something like this. Very little control over how the money was spent. It was basically asking for funds and it came out very quickly in some cases.

Sweigard: Oh, yeah, absolutely. And the Miami-Valley Community Action Partnership, which administered this program on behalf of Montgomery County, is what they said, like “we were just trying to help people.” We wanted to get out. And if we had too many controls in place, it would slow down rents. I mean, the purpose of this program, if you think about the end of 2020, the height of the pandemic, we didn’t want people to be kicked out of their homes because if they got sick from COVID or if their work was closed, a lot of people lost their jobs, we didn’t want the wave of homelessness. So there was this real need to get money for tenants and to help keep people in their homes. And so, there was definitely a rush to get the money out, and as we’ve seen in so many programs, whenever there’s a rush for the money, sometimes mistakes are made.

Kenney: Along with Anton, the drains now face federal charges. Is there anything else that comes out of your investigation? Have you found other examples of this type of fraud?

Sweigard: We have conducted several surveys on this program. As I said, there were other landlords we wrote about who received funds for condemned or uninhabitable properties. They were completely separate individuals. They actually refunded money to the county. Based on our finding. There are a number of other reports that we have written. You mentioned Job and Family Services. Unemployment, fraud, and overspending is a huge, huge amount of money, and so we’ve been following what’s been going on there with the unemployment fraud problem that’s worth hundreds of millions of dollars.

Then, of course, after the CARES Act, there were several other cycles. There is consolidated appropriations legislation, more recently ARPA, the American bailout, which is worth billions of dollars in this area alone. And if you look at the hundreds of millions of local schools, the hundreds of millions that the local governments have, the counties, the cities, the city of Dayton getting a huge amount of money, and the PPP program, I mean, there’s so much money that’s been spent in this time of need, and we’re trying to figure out where it all went and if some of it may have been mis-spent.

Kenney: We’ll definitely be keeping an eye out for any further work you do in this area. Josh Sweigart is an investigative reporter at the Dayton Daily News. Josh, thank you for your time and great reports on this.

Sweigard: Thanks.

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