HUD Halts Funding for Virgin Islands Housing Finance Authority for Mismanagement of Billions
WASHINGTON – Secretary Turner today announced the immediate suspension of funding for the Virgin Islands Housing Finance Authority (VIHFA) following findings of widespread financial mismanagement, inadequate fraud controls, false certifications, and improper payments uncovered during a HUD-initiated investigation.
Nearly a decade after VIHFA received $1.9 billion in HUD disaster recovery funding, VIHFA has spent less than one-third of the funds. However, evidence suggests officials spent these funds on administrative kickbacks and allegedly fraudulent schemes instead of on families or communities recovering.
“The Trump administration is changing the game when it comes to who we entrust with taxpayer dollars. Organizations riddled with corruption, mismanagement, and crime will no longer be allowed to squander billions,” said Secretary Turner. “Virgin Islands Housing Finance Authority officials cannot be allowed to prioritize kickbacks over helping families recover from disasters. I promised that HUD would be a faithful steward of the American people’s hard-earned money, and we are keeping that promise. Effective immediately, VIHFA is suspended from receiving another cent as we investigate. Working with the White House Task Force to Eliminate Fraud, we are putting every grantee on notice: there are real consequences for abusing taxpayer dollars.”
HUD’s investigation uncovered a pattern of fraud, financial mismanagement, and program failures at VIHFA including:
- VIHFA's former Chief Operating Officer, who oversaw disaster recovery programs, is serving a federal prison sentence after being convicted of fraud, money laundering, and criminal conflict of interest
- Despite receiving nearly $2 billion in federal dollars, VIHFA has completed just 2% of Single-Family Rental Rehabilitation projects and 0% of Single and Multifamily Housing projects
- HUD’s Office of Inspector General deemed VIHFA’s fraud risk management processes were “at or below the lowest desired goal state”
- VIHFA sought $6.2 million in disaster-related costs that FEMA had already paid
- Evidence suggests that VIHFA has repeatedly made false certifications claiming an effective compliance program and may have submitted additional false certifications to obtain further funding
Read the full notice here.
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