The Department of Housing and Urban Development (HUD) has suspended funding for the Virgin Islands Housing Finance Authority (VIHFA), claiming the agency mismanaged billions of dollars in federal aid.
In a statement, HUD said VIHFA received $1.9 billion in HUD disaster recovery funding nearly a decade ago but only spent less than one-third of the funds on its at-risk residents. An investigation into the agency found evidence of administrative kickbacks, a fraud-riddled risk management process, false certifications claiming to be in compliance with federal requirements, and additional false certifications to obtain more money from Washington.
HUD added VIHFA’s former chief operating officer, who oversaw disaster recovery programs, is now in prison after being convicted of fraud, money laundering, and criminal conflict of interest.
“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,” said HUD Secretary Scott Turner. “Virgin Islands Housing Finance Authority officials cannot be allowed to prioritize kickbacks over helping families recover from disasters. I promised that HUD would be a faithful steward of the American people’s hard-earned money, and we are keeping that promise.”
Turner added, “Effective immediately, VIHFA is suspended from receiving another cent as we investigate. Working with the White House Task Force to Eliminate Fraud, we are putting every grantee on notice: there are real consequences for abusing taxpayer dollars.”
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