The former executive director of the Chelsea Housing Authority (CHA), who is currently serving a three-year prison sentence, on Friday was sentenced to 12 additional months in prison and fined $3,000 for his role in rigging the inspection process for federally funded housing units.
Michael E. McLaughlin was previously sentenced to a three-year prison term for falsifying records to conceal his $360,000 salary as executive director. The additional sentence and fine stem from charges that he conspired 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," to ensure residences are in safe and sanitary conations and in good repair, according to federal regulations.
REAC inspections are conducted by independent contractors who have received training from REAC on the inspection protocol and regulations, and have been certified. 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 enables the inspector to generate a random sample of units at the scheduled date of the inspection.
From 2006 through November 2011, McLaughlin conspired with his assistant director, James Fitzpatrick, and Bernard Morosco, whom they hired as a consultant for the REAC inspection process in those years. During this time, Morosco, a certified REAC inspector who had access to the secure REAC database, would alert McLaughlin and Fitzpatrick to which units would be inspected so that they could make any needed repairs to the spaces. When the REAC inspectors conducted the inspections in 2007, 2009 and 2011, the units that were randomly selected were the same as the ones provided in advance by Morosco.
The trial of Fitzpatrick and Morosco has yet to be scheduled.
