Breaking the Sound Barrier

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Silence can be incriminating. By not speaking up and telling the truth about a variety of things, five family members residing in California were convicted of defrauding the government of more than $100,000 in housing subsidies they did not deserve.

To qualify for Section 8 housing subsidies, tenants have to meet a specified income limit, renew their housing application each year, and report any changes to their living status or financial situation within 15 days, otherwise a tenant’s housing subsidy can be terminated and they could be charged with an overpayment.

Two California housing authorities were involved in today’s ”Fraud of the Day” case. The story details that the father of a family of four – including his wife, son and daughter – received Section 8 rental assistance of $1,751 per month from the Sana Ana Housing Authority. His part of the deal was to pay $99 per month for housing. (That sounds like a pretty good deal.) But, they also received housing assistance from the Orange County Housing Authority (OCHA) in the amount of $176,000 over ten years. And they failed to report overseas wire transfers to China in the amount of $83,000.

It gets more interesting. The family was also receiving rent vouchers over the same 10 years that they were receiving assistance from the OCHA. The rent vouchers were for a residence owned by the patriarch’s sister and her husband. (As you might guess, they didn’t report that their residence was owned by a family member.)

Additionally, when the son turned 18, no one reported that he had earned income from selling illegal counterfeit merchandise to the OCHA. (That would fall under the category of a change in his financial situation, albeit an illegal one.) When the daughter turned 18, no one reported her income, the family’s income, nor her brother’s illegal merchandise sales. (Does that surprise anyone?)

In all, five family members were convicted of felony charges related to stealing more than $100,000 in government housing subsidies by falsifying information. The 66-year-old father is facing a maximum of 13 years and four months in state prison. He is scheduled to be sentenced. His 54-year-old wife was sentenced to five years of formal probation plus 212 days in county jail. Their 27-year-old son was sentenced to three years in state prison, while their 23-year-old daughter got off fairly easy with a misdemeanor and five years of informal probation plus 44 days in county jail. The patriarch’s 65-year-old sister was sentenced to five years of formal probation and 14 days in county jail. Her husband was sentenced to five years of formal probation and 14 days in county jail. He also paid $176,613 in restitution to the two housing authorities impacted by their crimes.

The family members at the center of today’s case thought that being silent would help to shroud their crimes. They did not count on the government breaking their sound barrier and turning up the volume on their criminal acts.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Five family members convicted of defrauding over $100,000 in government subsidies,” published by the Orange County Breeze on November 3, 2016.

Five family members were convicted yesterday of defrauding over $100,000 in government subsidies by falsifying information to receive housing assistance.

Dong Hong Phan, 75, Fountain Valley, pleaded guilty on Nov. 1, 2016, to one felony count of aid by misrepresentation, one felony count of grand theft by public housing fraud, and admitted sentencing enhancement allegations for taking over $50,000 and $100,000. He was sentenced to five years of formal probation and 14 days in county jail, and paid $176,613 in restitution to the Santa Ana Housing Authority and the Orange County Housing Authority.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.