Local property management agency landlord facing federal fraud charges for misappropriation of CARES Act funding
A Dayton-area landlord faces federal fraud charges following an investigation into how rental aid from the 2020 CARES ACT was spent. The money was supposed to provide relief for renters facing eviction during the pandemic. Josh Sweigart with the Dayton Daily News is the investigative reporter that began looking into possible misappropriated funds. He tells WYSO’s Jerry Kenney about his reporting that began a year ago.
Josh Sweigart: This began last year. We wanted to make sure we were keeping track of where all the CARES Act money went. So, we put in a record request with Montgomery County, which has received over $90 million in CARES Act funds about essentially who received all this money. And the first investigation we did into the rental assistance, we noticed that there were some rather large dollar amount of rent being paid in some neighborhoods where you wouldn't expect, at least in Dayton, Ohio, that rent to be that expensive and when I looked at the properties, I realized they were condemned. So that got our attention, and I ended up going out into the community and driving around to numerous properties that have received this rent assistance, only to realize that they were boarded up, the electricity was turned off, several of them were on the list of properties to be torn down, and they were literally condemned houses with nobody in them.
So, that was the first report we did, was that there was a number of these properties that had received rental assistance even though there was nobody living there and legally shouldn't be anyone living there. During that report, some of those landlords actually paid the money back to the county. After that story came out, we received a tip to look further into the landlord that received the largest amount of money, which was called Freedom for Living Properties. We did so and went door to door to the properties that had received this funding and were told by the tenants living there that they were unaware of any rental assistance that their landlord had received, and so these are people, some of whom were facing eviction, some of whom said that they had a hard time making ends meet to pay their rent. And it would appear that their landlord was receiving money on their behalf from the county and then allegedly not passing the benefit along to them.
Some of these people were on Section 8 and they paid a portion of their rent and Section 8 paid the remainder of it. So, they're legally required to pay their rent and Section 8 cover also covers their rent and so that raised questions, 'Well, hey, if this landlord is receiving $1,000 a month for eight months for this property where the housing authority and the tenant were paying the rent for that property then was he being, were they being overpaid?' So, we visited dozens of properties, and that report came out last year raising questions about those expenditures. That prompted an FBI investigation into our findings, which most recently has led to indeed criminal charges being filed against the owner of the company, an individual named Antoine Draines.
Jerry Kenney: As you mentioned, you've been keeping an eye on where some of the CARES Act funding has been going. This scenario really isn't hard to imagine when you consider how fast the funding was coming out. Job and Family Services faced something like this as well. Very little oversight into how the money was being spent. It was basically apply for the funds and it was coming out very fast in some cases.
Sweigart: Oh, yeah, absolutely. And Miami-Valley Community Action Partnership, which administered this program on behalf of Montgomery County, that's what they said, like 'we were just we were trying to help people. We wanted to get laid out the door. And if we had too many controls in place, then that would slow down people getting rent.' I mean, the purpose behind this program, if you think about late 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 job was shut down, a lot of people lost their jobs, we didn't want the surge of homelessness. So, there was this real need to get money to tenants and to help keep people in their homes. And so, there was definitely a rush to get the money out the door, and as we've seen in many, many programs, whenever there is a rush to get money out the door, sometimes mistakes are made.
Kenney: With Anton drains now facing federal charges. Is there anything else coming out of your investigation? Have you found other instances of this type of fraud?
Sweigart: There were several investigations we did into this program. Like I said, there were other landlords who we wrote about who received funding for properties that were condemned or not inhabitable. Those were completely separate individuals. They paid actually money back to the county. Based on our finding. There's a number of other reports that we've done. You mentioned Job and Family Services. The unemployment, fraud and overspending is a massive, massive amount of money, and so we've been following what happened there with the unemployment fraud issue is hundreds of millions of dollars.
Then, of course, after CARES Act came multiple other rounds. There is a Consolidated Appropriations Act, most recently the ARPA, the American Rescue Plan, which is billions of dollars just to this area. And if you consider the hundreds of millions local schools got, the hundreds of millions the local governments got, counties, cities, city of Dayton receiving a massive amount of money, and the PPP Program, I mean, there's just so much money that was spent in this moment of need, and we're trying to figure out where all of it went and if any of that perhaps was misspent.
Kenney: We'll certainly keep an eye on any further work you do in this. Josh Sweigart is an investigative reporter with the Dayton Daily News. Josh, thanks for your time and excellent reporting on this.
Sweigart: Thank you.