Sparrow Run landlords agree to $430,000 settlement over claim of inflated rent for subsidized housing

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Goodfish Enterprises, LLC; Reliant Property Management Company; and Christopher Lukacs have agreed to pay $430,000 to resolve allegations during their participation in the U.S. Department of Housing and Urban Development’s Housing Choice Voucher Program (HCVP), commonly known as “Section 8.”  the settlement came with no admission of liability. Sparrow Run, formerly Brookmont Farms, is located off of Route 40. Section 8 is the federal government’s primary program for helping low-income families, the elderly, and the disabled to afford housing in the private market. Goodfish, Reliant, and Lukacs own more than 90 townhouses in the Sparrow Run housing development in Bear. Many have been leased to low-income residents receiving rental assistance through the HCVP.  Regulations require landlords to certify that they are not charging a higher rent to HCVP tenants than they charge to unassisted tenants in comparable housing units.  In a lawsuit filed in December 2020, the United States alleged that dating back to at least January 2015, Goodfish, Reliant, and Lukacs charged HCVP (Section 8) participants higher rents than unassisted tenants.  The government also alleged that Goodfish and Lukacs provided false information on HCVP forms regarding the rents they received from unassisted tenants to justify the rents. As part of the settlement agreement, Reliant and Goodfish agreed to reduce rents being charged to some current tenants. “By illegally charging higher rents to residents receiving housing assistance than to residents who require no assistance, landlords overcharge the federal government and take money that should be used to help additional needy families,” said Delaware U.S. Attorney David Weiss.  “This settlement demonstrates that, together with our agency partners, my office will aggressively pursue those who attempt to profit by ignoring the laws that ensure that public money is not wasted.” “The Department of Housing and Urban Development, Office of Inspector General is committed to working with the Department of Justice and our law enforcement and housing partners to ensure that federal funds intended to help low-income families are not wasted or misapplied,” said Special Agent-in-Charge Shawn Rice. “HUD OIG also commends the New Castle County Police and the New Castle County Housing Authority who provided assistance in this investigation. Today’s settlement demonstrates the Government’s commitment to protecting the integrity of HUD programs against fraud, waste, or abuse.” This case was investigated by the U.S. Department of Housing and Urban Development Office of Inspector General.  The litigation was handled by Assistant U.S. Attorney Dylan J. Steinberg.
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