New policies for inspectors who missed welfare fraud at waterfront home

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by CHRIS INGALLS / KING 5 News

Bio | Email | Follow: @cjingalls

KING5.com

Posted on March 15, 2012 at 9:51 PM

Updated Wednesday, Oct 30 at 9:13 AM

SEATTLE -- The Seattle Housing Authority said it’s “refining” its policies for housing inspectors to try to put them in a better position to assess fraud in the program.

This follows the KING 5 investigative series that revealed SHA inspectors visited a million-dollar waterfront home eight times, but never raised suspicions about the tenant who lived there.

Lyudmila Shimonova received $1,300 a month in public rent assistance while living in the $1.2 million home on Lake Washington in Seattle.

SHA inspectors visit each of the 13,000 homes and apartments in Seattle that received Housing and Urban Development (HUD) vouchers to pay the rent for low-income tenants. The inspections are to ensure that the homes are safe and habitable.

SHA said traditionally inspectors have only had a list of addresses to visit in a given day.
 
More info at their fingertips
 
Now, inspectors have new information sheets that they carry with them so they have more details about the tenant’s circumstances.

“This new form tells us how many adults are in the home, it tells us how many children are in the home, it tells us income,” said SHA’s Lisa Wolters. “Are they on assistance? Is it unemployment?”

Wolters said the additional information will help inspectors determine if they’re seeing evidence of fraud that should be reported for further investigation.
 
Missed opportunities
 
That didn’t happen during eight years of inspections at the home in which Shimonova and her two children lived.

Inspectors say she had a good story about the landlord being a member of her synagogue who wanted to help her out.

In December, agents for HUD’s Office of Inspector General executed a search warrant at Shimonova’s south Seattle home. An affidavit filed with the court said agents believe Shimonova is actually married to the home’s owner, Seattle chiropractor Dr. David Silverstein.

SHA documents obtained by the KING 5 Investigators show Silverstein claimed to be Shimonova’s landlord when she applied for public housing assistance in 2003.

Agents allege that the couple is actually married and they both lived in the waterfront home together. It is against federal law to misrepresent income and living conditions on HUD applications.
 
Other homes?
 
Could there be other cases like Shimonova’s?
 
The KING 5 Investigators submitted public records requests to SHA seeking information about other big dollar homes that receive HUD rent checks.

SHA provided KING 5 News with records of thousands of addresses in some of Seattle’s pricier neighborhoods. Those records show there are only eleven homes that receive HUD vouchers that are valued over $400,000.  The highest property value is $610,000 – about half the value of the home Shimonova lives in.

SHA has been analyzing the same records, looking for evidence of fraud at other properties.

Wolters said they are taking a deeper look at a handful of properties, but they don’t believe there’s another Shimonova case out there.

“Shimonova was very disturbing, no one’s arguing with that” said Wolters. “But it was an isolated incident. I would not want the whole program to be painted with that brush.”

Neither Shimonova nor Silverstein has been arrested. However, they are facing a lawsuit filed by the federal authorities to get taxpayer money returned.

Sources have told KING 5 that criminal charges are expected to be filed in federal court.

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