Federal housing officials may demand that the Chelsea Housing Authority return $7 million in grants, charging that the agency filed false and deliberately misleading reports to obtain the money under disgraced former director Michael E. McLaughlin.
Housing and Urban Development officials have been trying for months to document what happened to the millions in grants that were supposed to pay for modernization of low-income apartments from 2002 to 2009, but that McLaughlin apparently diverted to pay everyday expenses and higher salaries for himself and key lieutenants.
Now, HUD’s regional director says she is “astounded by the lack of knowledge, interest, responsibility, and ownership” among current Chelsea housing officials about past misuse of money, and is considering the rare step of asking for the money back.
“The consequences for these egregious actions are severe,” wrote HUD regional director Marilyn B. O’Sullivan in a Dec. 27 letter to the Chelsea housing agency. “And further penalties may be imposed against the authority including . . . the possible recapture of all funds” that the federal government provided to modernizing the apartment of about 950 residents.
O’Sullivan’s letter underscores the dramatic decline of the Chelsea Housing Authority from only a few years ago, when HUD ranked it as one of the top-performing public housing agencies. But Chelsea housing has been reeling since late 2011, when McLaughlin resigned amid the uproar over his inflated $360,000 annual salary. On Wednesday, McLaughlin was charged by federal authorities with four felony counts of deliberately concealing his full salary from regulators.
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