In early August, the Department of Justice (DOJ) announced the United States filed a complaint in intervention against the City of Los Angeles and the former Community Redevelopment Agency of the City of Los Angeles (CRA/LA).

The allegation is, together, the CRA/LA and the City of Los Angeles fraudulently obtained millions in housing grants from the U.S. Department of Housing and Urban Development (HUD). These funds were obtained under the false certification they would be spent in compliance with federal accessibility laws. The complaint in intervention replaces a complaint previously filed on behalf of the United States by a whistleblower under the False Claims Act (FCA).

HUD is a Cabinet department of the Executive branch of the federal government. One of HUD’s primary goals is to establish and maintain a suitable living environment for all Americans. Generally, HUD works to improve and develop communities and additionally enforces fair housing laws.

In this case, HUD granted federal funds to the City of Los Angeles for creation of housing for people with disabilities in compliance with federal accessibility laws. CRA/LA and the city are required by law to comply with federal accessibility laws. However, the City of LA authorized the design and construction of inaccessible buildings.

The complaint includes alleged violations of Section 504 of the Rehabilitation Act, the Americans with Disabilities Act, and the Fair Housing Act. Section 504 of the Rehabilitation Act prohibits discrimination of disabled persons under any program or activity receiving federal funds or conducted by any Executive agency. The Americans with Disabilities Act prohibits discrimination against individuals in all areas of public life. The Fair Housing Act protects individuals from discrimination in renting, buying, or securing financing for a home.

In the repeated certification of compliance with federal accessibility laws, the U.S. alleges that the former CRA/LA and the City of LA defrauded the government in direct violation of the FCA.

“Despite the federal government investing hundreds of millions of dollars in Los Angeles to create housing for everyone, the City of Los Angeles instead created housing only for some,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “For 17 years, the city falsely certified that it had complied with federal law and covered up its repeated disregard of historic and important civil rights laws.”

The complaint in intervention is indicative of HUD’s mission to ensure equal access to federally funded public housing. The initial lawsuit was filed in U.S. District court by whistleblowers Mei Ling, a Los Angeles inhabitant who uses a wheelchair, and the Fair Housing Council of San Fernando Valley, a nonprofit civil rights advocacy group. The U.S. Government elected to intervene in the lawsuit and take over the case, unsealing the whistleblowers’ complaint.

The case against the City of Los Angeles was brought under the qui tam or whistleblower provision of the FCA. This provision allows private parties to sue on behalf of the United States when they believe a party has submitted false claims for government funds. Incentives for blowing the whistle include governmental protection from retaliation and 15 to 25 percent of the recovered funds. This particular case is still pending in District Court.

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Are you aware of fraud being committed against the federal government, or a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.

U.S. Department of Justice
U.S. Department of Housing and Urban Development
29 U.S.C. § 701
42 U.S.C. § 3604

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