HUD Cuts Funding to Virgin Islands Housing Authority

The Department of Housing and Urban Development (HUD) announced on Monday that it has halted federal funding for the U.S. Virgin Islands Housing Finance Authority (VIHFA), citing years of fraud and mismanagement linked to nearly $2 billion in hurricane relief funds.

HUD Secretary Scott Turner is intensifying scrutiny of federal grant recipients, and the VIHFA is now in the spotlight. Reports indicate that Turner, who is part of the White House Task Force on Combating Fraud, is taking a hard stance on this issue.

Turner, who has a background as an NFL cornerback, mentioned that this action represents a shift in the government’s approach to grant management. “The Trump administration is changing the game when it comes to who we trust with taxpayer money. We can’t let corrupt and mismanaged organizations squander billions any longer,” he stated. He emphasized that VIHFA officials should be more focused on helping families recover rather than seeking kickbacks.

The suspension of funding is effective immediately, according to Turner. His attorney, Andrew Hughes, has notified VIHFA official Dana Clendinen that she is barred from any future federal contracts while an investigation is underway.

HUD reports that the funding, allocated for rebuilding efforts after Hurricanes Irma and Maria ravaged the region in 2017, amounts to about $20,000 for each resident of the Virgin Islands.

In a sharp criticism, HUD remarked, “Nine years later, the blatant mismanagement of these essential disaster funds has left USVI citizens without the housing and utilities they were promised almost a decade ago.”

This action follows a criminal conviction of Darrin Richardson, the former chief operating officer of VIHFA, who was sentenced to 36 months in prison earlier this year for crimes including bank fraud and money laundering. Prosecutors determined that he had received $107,000 from contractors involved in a timber project.

“As alleged, these defendants exploited hurricane recovery efforts to execute a scheme defrauding taxpayers of $4 million,” U.S. Attorney Delia L. Smith stated.

An audit from the HUD Inspector General revealed in March that VIHFA lacks effective fraud risk management processes to prevent and detect fraud. The agency noted that while VIHFA expended $52.6 million in administrative costs, none of its 329 residential labor relief projects were completed.