The Massachusetts State House. iStock photo / file
Quasi-public state housing finance agency MassHousing has released the results of its own investigation into a million-dollar fraud case involving a former top Baker administration official.
The investigation was carried out by law firm Mintz at the request of MassHousing leadership.
Mintz lawyers confirmed the Boston Globe’s reporting in June that Tony Richards II, MassHousing’s former vice president of equitable business development, awarded $1.4 million in grant money to two developers who sold him his house for $204,000 below its original listing price just months earlier.
The Globe and the investigation both reported that Richards, who was former Gov. Charlie Baker’s deputy chief of staff before joining MassHousing in 2021, knew the developers, Gary Acquah and Reggie Woods, were the same people who’d sold him his house in December 2022 when he awarded them and their company, Flex Investments LLC, the Gateway Housing Rehabilitation Program grants in June 2023.
Richards also listed Acquah and Woods in early 2023 as potential members of a seemingly short-lived “Equitable Business Kitchen Cabinet” intended so “emerging real estate professionals could connect and discuss pre-development and post-development capital needs,” the Mintz report stated.
Based on emails and interviews with MassHousing staff, the Mintz investigators say Richards lied about his relationship with the two when the state Office of the Inspector General looked into the grants to Aquah and Woods in 2024, violated state conflict of interest rules and referred the case to the State Ethics Commission.
But the report notably said investigators found no evidence Richards used his relationship with Acquah and Richards, which dated back to 2021, to get a lower price on his house or that he improperly influenced the 2023 grant awards he oversaw, and which MassHousing CEO Chrystal Kornegay approved.
“Based on the information provided and the interviews conducted, there does not appear to be any evidence that Mr. Richards interfered with or otherwise influenced the GHRP application process or the reviewers’ decisions to recommend Flex Investments for awards,” the report said. “Further, the evidence reveals that all qualified applicants received awards and that no one was denied funding due to the size of the Flex Investments awards.”
Grants Awarded to Developers Accused of Fraud
Critics, including State Auditor Diana DiZoglio, said the grant program “reeks of fraud and corruption” in comments to the Globe shortly after the Spotlight investigation was released in June. She and other critics questioned MassHousing’s decision to hire Mintz to perform the investigation, given the firm’s long business relationship with the agency.
Acquah and Woods and their company used the $1.4 million in grants from the Gateway Housing Rehabilitation Program to renovate a series of properties in PIttsfield and Worcester, but performed such shoddy work it triggered the 2024 Office of the Inspector General investigation, the Mintz report said. The grant program was created in early 2023 to help smaller developers fix up decayed rental housing in Massachusetts’ 26 working-class, largely industrial Gateway Cities.
The Globe reported that Acquah and Woods also submitted fake contractor invoices to MassHousing, which triggered payments for work that was either done poorly, or not at all. Attorney General Andrea Cambell’s office told the Globe in June it is investigating the case, and another not covered by the Mintz investigation.
MassHousing emails and an internal report included in the Mintz report show a lengthy punch list after inspections of the three Pittsfield rental properties Flex Investments renovated with grant money, including cracks and holes in siding, flooring that needed replacing, peeling interior paint, dangerous stairs, signs of a possible bedbug infestation and kitchen countertops that had been painted over instead of replaced.
In a statement posted to MassHousing’s website and a letter she co-signed with Kornegay, board chair Jeanne Pinado said MassHousing has asked the State Ethics Commission to provide “enhanced, in-person conflict-of-interest training for staff” and is adding “multiple levels of independent review and approval” to its grant programs. The agency is also standardizing its inspection, project-monitoring, cost-certification and closeout requirements for grants.
“The third-party review details failures of ethical disclosure and a disheartening lack of candor by a former employee toward Agency leadership. Importantly, it also found no evidence that the former employee improperly influenced grant review or funding decisions,” Pinado said in a statement. “The review also identified weaknesses in MassHousing’s administration and oversight of the Gateway program. MassHousing takes responsibility for those shortcomings and welcomes all recommendations for strengthening program controls and oversight. Our focus is on learning from these findings, making the necessary improvements and ensuring that the Agency continues to meet high standards across all of its work”
