The longtime head of the state’s only homeless shelter with an almost entirely Spanish-speaking staff has agreed to pay $6 million to settle a civil suit brought by Attorney General Maura Healey, who charged him with pocketing millions of dollars that were supposed to help homeless people.
Manuel Duran, who is also facing criminal charges, claimed to have amassed a real estate empire worth more than $22 million by 2019, buying and selling more than 20 properties while running the Roxbury nonprofit agency.
Under the agreement, Duran will have to sell nine properties — including three homeless shelters — and turn over the proceeds to the state. The state alleges he stole $2.29 million from the agency, Casa Nueva Vida, but under the state’s false claims law, it can seek triple damages. A judge approved the settlement on Wednesday.
“Manuel Duran diverted state funding meant to help families in need of shelter and housing assistance for his own personal enrichment,” Healey said in a written statement. “With this resolution, my office is holding him accountable for this egregious scheme and will return nearly three times the amount of money he stole from the state.”
Duran’s lawyer, Thomas Dwyer, said the settlement is the largest ever paid by an individual charged under the state’s false claims law.
“Without question, the attorney general took a very aggressive position in demanding $6 million, ” said Dwyer. “Mr. Duran has expressed sorrow for this situation and is working every day to make amends.”
Dwyer said that even though some of the properties are homeless shelters, no residents will be displaced. Existing leases will be honored, he said.
Duran, most recently Casa Nueva Vida’s executive director, controlled its day-to-day operations as well as its real estate investments and leases with little oversight. He resigned last April.
No one from Casa Nueva Vida responded to requests for comment.
The agency, which serves 150 families in 14 locations in Boston and Lawrence, took in $33 million in state funds from the Department of Housing and Community Development for emergency homeless shelter services.
The civil suit alleges that in documents filed to receive the funds, Duran never disclosed that he had personal financial interests in properties that Casa Nueva Vida was leasing.
Prosecutors allege that Duran stole from the nonprofit in elaborate schemes in which he secretly rented his own properties to Casa Nueva Vida for shelters. He charged exorbitant rents, prosecutors say, while using the lease agreements to obtain massive bank loans to expand his real estate holdings.
Prosecutors say Duran frequently charged Casa Nueva Vida substantially more in rent than it would have paid on the open market. In some cases, Duran had the shelter pay to improve the properties.
If the nine properties don’t bring in $6 million, he will have to sell a 10th, according to the agreement.
Duran still owns other properties — and has sold several in the past year, investigators said. If the properties bring in more than $6 million, he would get to pocket the difference.
The history of one property Duran must now sell, located at 6 Ware St. in Dorchester, illustrates the way he enriched himself at Casa Nueva Vida’s expense. He bought it in 2015 for $450,000 without disclosing to his board that he owned it. When he applied for a mortgage, the rental value of the property was determined to be between $3,000 and $3,800 a month. Yet, he charged Casa Nueva Vida $6,800 a month, prosecutors said.
The first $500,000 Duran is required to pay to the state will come from the proceeds of the sale of a property at 86-88 Howland St. in Roxbury where, prosecutors say, Duran reaped a small fortune.
Prosecutors say Casa Nueva Vida leased the Roxbury property from a front company controlled by Duran for $9,200 a month for three years. The organization also paid to renovate the property. In all, Casa Nueva Vida spent $480,000 on the property — but it was never used as a shelter. Then, Duran sold the property for $1.2 million, according to the Suffolk County Registry of Deeds.
Under the settlement, Duran is permanently banned from working with Casa Nueva Vida or in a key position at any other Massachusetts public charity. He is also barred form working for any business connected to the state or that receives state funding.
In September, Duran was also criminally indicted by a Suffolk County grand jury in connection with stealing from Casa Nueva Vida and lying under oath to hide his self-dealing. The criminal case against Duran is ongoing. A pretrial conference is scheduled for Feb. 18. He is charged with perjury, larceny over $1,200, and making false entries in corporate books.
Investigators allege that between 2012 and 2020, Duran created fraudulent invoices and contracts to cash checks made out to vendors for work they never performed. The vendors — who he claimed did renovations or lead or asbestos removal — cashed the checks with Duran present, and gave him the money, prosecutors said. Duran allegedly stole $242,012 from Casa Nueva Vida through these fraudulent vendor payments, the prosecutors said.
The attorney general also alleges that Duran stole approximately $140,831 by depositing directly into his own bank account paychecks issued to a seasonal maintenance employee who was in Puerto Rico when the paychecks were issued and didn’t perform any work.
Two Casa Nueva Vida employees, Oscar Vega and Jose Martinez, have filed separate suits against the organization and Duran, alleging that he required them to work at some of his properties but never paid them for the extra hours. Their suits are pending, according to their lawyer, John Koury.
Andrea Estes can be reached at email@example.com.