AUGUSTA — Between February and May of this year, 56 applications for $1.3 million of federal emergency rental assistance submitted to the Kennebec Valley Community Action Program were flagged for further investigation.
Because information provided on those applications was found to be invalid, they were denied.
The Emergency Rental Assistance program is one of a slate of pandemic-related relief programs designed to help those who have suffered income losses as a result of the spread of COVID-19.
MaineHousing, the Maine state housing authority, has been tracking fraud claims associated with the federal program. As part of that effort, it has found the vast majority of alleged fraud complaints have been identified by the state’s community action programs.
“MaineHousing knew from the start that this program could be a target for fraud. We set up a process to flag suspicious applications and vet things that didn’t look right,” said Daniel Brennan, director of MaineHousing.
“The vigilant workers at the community action agencies that process applications, working with our fraud prevention team, ensure these benefits go to those who are eligible and needy, and not to scammers who would cheat a program meant to help Mainers facing hard times.”
KVCAP, which provides social services to residents of Kennebec and Somerset counties, including energy and housing services, has been screening applications for rental assistance in the region it serves.
“We look for inconsistencies,” Monica Grady, senior director of energy, housing and community initiatives for KVCAP, said Thursday. “When we find things that give us pause, we look further into the details, and if we find the areas that don’t fit in the scope of the program, we do report those to the Maine State Housing Authority.”
Grady said the agencies perform routine checks on the information they receive from tenants and landlords, and identify inconsistencies. They also document instances where the information gives them pause, and track information that MaineHousing has shared on suspected fraud from other community action programs across the state.
“As we put together the pieces, if something is not jiving, it is our job to ask more in-depth questions to find out more information,” Grady said. “We have to make sure we’re following the (US Department of the) Treasury standards, and not going against federal regulations.”
KVCAP identified more fraudulent claims than any other community action program in the state during the first three months of the year. By March, the number of fraudulent claims the agency received — 54 — was already more than double the amount it received in all of 2021.
The Kennebec and Somerset county agency has now reported the second-highest share of fraudulent requests for rent relief since the program’s inception, behind the York County Community Action Corporation.
Both MaineHousing and KVCAP have added staff members to review red flagged applications that have raised questions about the legitimacy of the claim they contain.
According to the Maine State Housing Authority, KVCAP flagged a suspicious application that linked to six other related applications to three community action agencies with connections in Florida.
“These seven applications could be used as a case study of fraud and red flags, including the creation of fake addresses, forged documents, the use of a tenant’s name who died in 2020 and a confusing web of phone numbers, email addresses and locations in Maine and Florida,” the report states.
Scott Thistle, communications director for MaineHousing, said KVCAP has been vigilant in flagging cases of suspected fraud and identifying them for further investigation. That includes checking telephone numbers and email addresses that have proved invalid, which has resulted in application denials.
“They’ve been really valuable partners,” he said, “and they’re doing an incredibly good job.”
MaineHousing will refer cases of suspected fraud to local and federal law enforcement agencies. To date, Thistle said, nine cases have been sent to law enforcement agencies in Maine and four have been referred to the US Attorney’s Office.
In cases where funds were paid in error, MaineHousing sends out a demand letter and tries to arrange repayment. Currently, 25 cases are pending statewide, he said.
When a repayment arrangement cannot be worked out or the tenant or landlord fails to make payments on schedule, those cases go to small claims court, where there are now three active cases, according to Thistle.
“The $6.4 million that didn’t go out the door to bad actors,” he said, “is $6.4 million that can go to people who really need it.”
Agency safeguards catch roughly $6.4 million in fraudulent emergency rental relief claims