Crime - Sacto 911

Landlord to pay $75,000 to resolve alleged Section 8 overcharges

A Sacramento landlord will pay a $75,000 settlement stemming from allegations that she submitted false claims while participating in the "Section 8" federal housing subsidy program.

U.S. Attorney Phillip A. Talbert on Monday announced resolution of Federal Claims Act allegations against Leatha Henderson.

The Housing Choice Voucher Program, commonly known as Section 8, was enacted to help low-income families obtain decent, safe, sanitary and affordable housing. The United States Department of Housing and Urban Development administers the program through annual contribution contracts with local public housing agencies such as the Sacramento Housing and Redevelopment Agency. Participating low-income tenants pay 30 to 40 percent of their adjusted monthly income toward their rent and utilities, and the federally funded program pays the balance.

Henderson contracted with the Sacramento Housing and Redevelopment Agency to participate in the Section 8 program and received government payments for her Sacramento rental property between June 2007 and May 2013, according to a U.S. Attorney’s Office news release. Under the terms of the housing assistance payment contract, the federal government was to pay 62 to 68 percent of the rental rate stated in the contract and the tenant was to pay the remaining 32 to 38 percent. The contract restricted Henderson from charging the tenant rent in excess of the tenant share designated by the SHRA based on the tenant’s income.

Officials said the settlement resolves allegations that Henderson falsely certified compliance with this rental payment restriction and fraudulently collected rental payments from both the federal program and the tenant during the term of the tenancy.

The allegations addressed in the settlement were first raised in a lawsuit filed against Henderson under “whistleblower” provisions of the False Claims Act by Sondra Madden, the tenant involved in the Section 8 tenancy.

Officials noted that the False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower in this case will receive approximately $13,500 of the recovery,officials said.

“Charging in excess of the agreed tenant rate frustrates a primary goal of this important program: to provide affordable housing to low-income families,” U.S. Attorney Talbert said in a written statement. “Landlords participating in the Section 8 program will be strictly held to their obligations under the governing regulations.”

The case resulted from an investigation by the federal Department of Housing and Urban Development’s office of Inspector General.

Cathy Locke: 916-321-5287, @lockecathy