Mayor Brandon Johnson and Corporation Counsel Mary B. Richardson-Lowry are turning up the heat on an alleged fraud case involving Chicago’s Emergency Rental Assistance Program (ERAP), the City announced today. With a lawsuit filed against a former City employee and a so-called property management company, they're looking to recoup funds and hit the defendants with penalties and triple damages. The defendants are accused of scamming the system out of over $200,000 by submitting fraudulent rental assistance applications.
The assistance program, originally crafted to help low-income Chicago households during the economic fallout from COVID-19, offered up to 18 months of unpaid rent and utility expense coverage, plus future payment assistance for eligible tenants. Recognized by the White House as a beacon of innovation in 2022, ERAP used federal grant funds for administration. HAM Management, LLC, the property management firm in question, joined the ERAP fray only a month after the program was announced by the City, allegedly submitting false applications with fabricated tenant information and rent details.
In a statement found on the City's website, Mayor Johnson emphasized the gravity of the initiative, saying, "ERAP was an important program that kept thousands of Chicagoans in their homes during the height of the pandemic." The unlawful actions of these individuals, according to the City, represent a betrayal of trust and misuse of critical housing resources.
Among the named defendants were Ilyas Lakada, a former City attorney, and individuals connected to HAM Management. The City’s probe into HAM Management, which was never actually managing the properties it claimed to represent, unveiled more than two dozen applications seeking over $705,250 in wrongful payments. According to the legal professionals from the Department of Law’s Affirmative Litigation Division representing the City, this misconduct won't be taken lightly.
Lissette Castaneda, Commissioner of the Department of Housing, pointed out the success of the ERAP despite the unfortunate circumstances. Castaneda mentioned, "In all, DOH and our partners were able to provide over $170M in grant assistance to more than 30,000 tenants and landlords, keeping families in their homes despite often dramatic loss of income," as noted by the City of Chicago. Although the fraud cases represent a small fraction of the total grants, they underscore the importance of vigilance in the management of such emergency programs. With a team of attorneys including Deputy Corporation Counsel Stephen Kane and Assistant Corporation Counsel Chelsey Metcalf at the helm, the City intends to ensure that justice is served and public funds are safeguarded.
