U.S. Attorney’s Office Reaches Settlement Under The False Claims Act Over Allegations That Defendants Collected Excess Rent | USAO-EDMI

Mae Ava Carse Properties, LLC, PHP Property Managers, LLC, Claude E. Phillips Properties, LLC, and Deborah J. Payne (Defendants) have agreed to pay the United States $150,000 to resolve allegations that they violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by knowingly and unlawfully collecting excess rent from certain tenants participating in the U.S. Department of Housing and Urban Development’s (HUD) federal Housing Choice Voucher Program, commonly referred to as “Section 8,” which is a program for assisting low-income families, the elderly and the disabled in securing decent, safe, and sanitary housing in the private market. Through this program, HUD provides funding through vouchers that are administered by local public housing agencies. HUD pays the housing subsidy, which may cover all or a portion of a tenant’s monthly rent, directly to the landlord. As a condition for receiving the housing subsidy, the landlord contractually agrees not to charge the Section 8 tenant rent in excess of the amount set by the public housing agency.

Defendants leased property to certain tenants participating in the Section 8 program. This settlement resolves allegations that from 2013 to 2018, Defendants violated the False Claims Act by knowingly requiring certain Section 8 tenants to pay rent that exceeded what was contractually allowed. 

United States Attorney Matthew Schneider stated, “The Justice Department is committed to tracking down unscrupulous landlords who take advantage of low-income renters.  We do this by protecting renters who benefit from the federal Housing Choice Voucher Program.  We bring these cases to come to the defense of Michiganders who need affordable quality housing.”

The settlement resolves allegations contained in a lawsuit filed by a former tenant under the qui tam, or whistleblower, provisions of the False Claims Act. The whistleblower was represented by the University of Michigan Clinical Law Program. The False Claims Act permits private parties to file suit on behalf of the United States and to share in any recovery. 

The matter was handled by Assistant United States Attorney John Postulka from the U.S. Attorney’s Office for the Eastern District of Michigan. The qui tam case is docketed as United States ex rel. Willis v. Mae Ava Carse Properties, LLC, et al. Case No. 19-cv-12486 (E.D. Mich.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

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