The Department of Housing and Urban Development (HUD) suspended the U.S. Virgin Islands’ housing-finance authority from federal funding Monday, alleging years of fraud and mismanagement tied to nearly $2 billion in hurricane relief.
HUD Secretary Scott Turner has been increasing his focus on federal grant recipients. His latest target is the Virgin Islands Housing Finance Authority (VIHFA), from which HUD suspended further funding, according to a report by Fox News Digital. Turner is a member of the White House Task Force to Eliminate Fraud.
Turner, a former NFL cornerback, said the action shows a shift in how the administration treats grant recipients.
“The Trump administration is changing the game when it comes to who we entrust with taxpayer dollars. Organizations riddled with corruption, mismanagement, and crime will no longer be allowed to squander billions,” Turner told the outlet. “[VIHFA] officials cannot be allowed to prioritize kickbacks over helping families recover from disasters.”
Turner said the suspension is “effective immediately.” His deputy, Andrew Hughes, sent a 13-page letter to VIHFA official Dayna Clendinen barring the authority from future federal procurement while an investigation proceeds.
HUD said the nearly $2 billion appropriation was intended for recovery after Hurricanes Irma and Maria devastated the American archipelago in 2017, about $20,000 per Virgin Islands resident.
“Nine years later, because of VIHFA’s blatant mismanagement of these critical disaster funds, USVI citizens still do not have the housing and electrical power they were promised nearly a decade ago,” the agency wrote.
The suspension follows the criminal case against the authority’s former chief operating officer, Darin Richardson, 56, of St. Thomas, who was sentenced in March to 36 months in prison after being convicted of bank fraud, money laundering, and criminal conflict of interest. Prosecutors said Richardson received $107,000 from a contractor tied to a lumber scheme.
“As alleged, these defendants exploited hurricane recovery efforts in order to develop and carry out a $4 million scheme to defraud taxpayers,” U.S. Attorney Delia L. Smith said.
A HUD inspector general audit released in March found the authority “does not have fraud risk management processes to prevent and detect fraud risks.” The agency said VIHFA spent $52.6 million on administrative costs alone, and none of 329 housing-work mitigation projects had been finished.
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