Fighting fraud in public housing

For years, Sophia Mohamed Ali collected public assistance for her low-income housing in Burnsville. She's now facing charges for defrauding the system of nearly $6,480.

The mother of two allegedly broke the rules of the Dakota County Community Development Agency (CDA) by not reporting that she had a mate living with her, much less his income. Ali, 34, is now charged with two felony counts of theft by false representation. And she lost her subsidized housing.

Hers is among a couple dozen welfare and housing fraud cases that are now being charged by the Dakota County attorney's office, where cases had backed up last year because of staffing cuts.

Such fraud is detected in only about 2 percent of several thousand households that the CDA helps with housing assistance each year, officials say.

But now, the prosecution of people wrongfully obtaining such housing assistance could matter all the more.

After Wednesday, the Dakota County CDA will stop taking applications for Section 8 housing vouchers for a few years because the waiting list has grown so long. The program uses federal money to subsidize housing for low-income individuals and families who live, work or go to school in the county.

The wait is already three to five years for the 4,600 or so households on the list.

"It definitely makes me angry," Heidi Hasbargen, a 25-year-old mother of one, said of those who cheated the system while she and others could not get in, though they're eligible.

"Obviously, there's nothing I could do about it, but it frustrates me," she said.

Hasbargen, a college student and social-work intern, said she waited on a Section 8 list for two years in Dakota County. "Nowhere could I get in," she said.

She finally gave up and moved to Hennepin County.

It's not only people like Hasbargen who are indirectly hurt by housing fraud thefts.

Sheriff's detectives go to the homes after an initial screening by CDA investigators. Tips often come from apartment managers, neighbors and scorned companions. Rogers and others check for shoes, clothing, toiletry items and other signs that someone who is not authorized to live there may be doing just that.

"The rules are not that hard to follow," Rogers said, "and yet people take advantage of it."

Take one case now under investigation: A woman was collecting housing benefits for an Apple Valley unit while allegedly living in Egypt -- and allowing a couple of men to live in the CDA unit.

As in Ali's case, failing to report a change in a household, such as a new husband who moves in, could be a felony crime. And that's not all.

"These people are just heartbroken" when they learn that their actions caused them to be terminated from the subsidized housing program, Wayne said.

Dakota County Attorney James Backstrom said his office is catching up in such prosecutions.

"The impact of these offenses affects everyone because we're all taxpayers," he said. "Our taxes can and in fact are increased to address thefts from these programs."

Ferreting out fraud

The U.S. Department of Housing and Urban Development asks the local agencies that administer the benefits to close down applications when there's no reasonable chance of reaching people within the next few years, Ulfers said.

"The only way that we can serve new households is through turnover -- when people leave the program because they no longer need it, or they move out of the area," he said.

His agency orders roughly 75 households a year to move out because of fraud, he said.

Some thefts involve ineligible people who are not reporting their income, and others involve those who would be eligible but should be paying a much higher rent, Ulfers said.

Melissa Taphorn, CDA housing assistance director, said people are prosecuted when losses total more than $2,000. Smaller thefts are handled administratively and must be repaid.

Though convicted offenders rarely go to jail for such crimes, Backstrom agrees the thefts are "a serious concern."

"These are individuals who are receiving public benefits," he said. "There are rules and regulations that need to be followed in these programs, and when you're not following those rules, you shouldn't be entitled to receive those benefits. That's the bottom line, and it's a crime."