Former Chelsea housing manager tells of lies at agency

A former Chelsea Housing Authority manager testified in court on Thursday that he went along with so many lies on behalf of a former executive director that he once told investigators “I leave my soul at home when I come to work.”

“There were ethical issues concerning what I was doing,” Vitus Shum, the former financial director, testified. “I may have been following the wrong orders.”

Shum testified his orders came from Michael E. McLaughlin, the former executive director who previously pleaded guilty to corruption charges and is now serving a three-year prison sentence.

Special Section: The Chelsea housing pay scandal

McLaughlin even managed to hoodwink the US Department of Housing and Urban Development, Shum testified. HUD funds and oversees thousands of apartments in the country for elders and other people who receive a low income.

Shum is testifying in US District Court in Boston under a grant of immunity in the prosecution of another former Chelsea Housing Authority manager and a former consultant to the housing agency. The defendants are accused of conspiring to defraud the government by rigging HUD’s biennial inspections of apartments in Chelsea to guarantee the highest possible performance rating for the local housing agency. HUD rewards high performers with wider discretion in spending.

Shum testified that McLaughlin paid great attention to inspections. Under HUD guidelines, local housing agencies are not supposed to know which of their apartments are to be inspected until a HUD contractor shows up and runs a computer program that selects the units. In a housing agency of Chelsea’s size, two dozen apartments would be chosen from its several hundred units.

Although the apartments are supposed to be randomly chosen, Shum testified, he and other Chelsea Housing Authority managers were told several days before the inspections which specific units they should expect to be selected for inspection. That allowed the managers to make sure those apartments were in near-perfect condition for inspection.

The advance information came from Bernard J. Morosco, a HUD-certified inspection contractor, Shum testified. Morosco had been hired by McLaughlin and paid more than $25,000 in consulting fees over seven years.

Later on Thursday, a HUD information technology manager testified that Morosco, as a certified contractor, had access to the HUD computer server on three occasions when the Chelsea Housing Authority’s apartments were inspected. All three times Chelsea got a perfect or near-perfect grade, HUD manager Patrick Evans testified.

But the agency’s inspection score plummeted by more than 25 percent in 2012, after Morosco no longer had access to the server and McLaughlin had resigned under fire, Evans said.

Shum, who retired in 2012, also gave testimony against the other defendant, James H. Fitzpatrick, the authority’s former assistant executive director.

Under questioning from Assistant US Attorney S. Theodore Merritt, Shum testified that Fitzpatrick had been designated by McLaughlin as the agency’s “point person” for communicating with Morosco.

But under questions from attorney Janice Bassil, who is representing Morosco, and from Syrie Fried, who is representing Fitzpatrick, Shum testified that he repeatedly deceived federal and state regulators by helping to hide McLaughlin’s $360,000 in salary at the small agency.

Shum testified that he went along with McLaughlin’s “cover story” among employees that managers knew which apartments would be inspected and therefore could repair them beforehand because Shum had figured out a “formula” to obtain the information.

He testified that he went along when McLaughlin failed to make promised improvements, like new boilers and modernized kitchens, because McLaughlin used the money instead to pay his inflated salary.

And he testified that he went along when McLaughlin did not show up for work half the time, failed to fill out time cards, and traveled frequently to out-of-state conferences.

“I was following orders,” he said.