The former assistant director of the Chelsea Housing Authority (CHA) and a former public housing inspector on April 1 were convicted for their roles in rigging the inspection process of federally funded housing units.
James Fitzpatrick of Acton and Bernard Morosco, a former public housing inspector from Utica, N.Y., were convicted of conspiring to defraud the United States and the U.S. Department of Housing and Urban Development (HUD) by impairing, impeding and defeating the proper operation of HUD’s physical condition assessment.
HUD’s Real Estate Assessment Center (REAC) is required to “provide for an independent physical inspection of a public housing authority’s property or properties that includes, at a minimum, a statistically valid sample of the units in the CHA’s public housing portfolio to determine the extent of compliance with the standard,” pursuant to federal regulations. REAC inspections are conducted by independent contractors who have received training from REAC on the inspection protocol and applicable regulations and have been certified by HUD. Once certified, an inspector is given an inspector number and with a password, can access the secure REAC server, which contains data on all public housing authorities and also later enable the inspector to generate a random sample of units to inspect on the scheduled date of the inspection.
In 2007, 2009 and 2011, Morosco gave Fitzpatrick advance lists that revealed which CHA units would be inspected. At that time, Morosco, who was a REAC-certified inspector, worked for the CHA as a consultant, advising the CHA about how to get better scores on its REAC inspections.
One or two months before each REAC inspection, using information provided by Fitzpatrick, Morosco accessed HUD’s secure database and downloaded information that enabled him to use his REAC software to generate, in advance, the random sample that would later be generated by the assigned REAC inspector. Morosco then gave the samples to Fitzpatrick who, in turn, provided it to the CHA’s Former Executive Director Michael McLaughlin. McLaughlin would then send teams to inspect the units and make repairs, fumigate and exterminate before the inspection.
McLaughlin is currently serving a three-year prison sentence for his involvement in the scheme.
The case is being prosecuted by Assistant U.S. Attorneys S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit and Brian Pérez-Daple of Ortiz’s Economic Crimes Unit.
