RALEIGH, N.C. (WTVD) — The North Carolina Finance Housing Agency (NCHFA) reported $2.7 million worth of theft to the North Carolina State Bureau of Investigation in April 2023, according to records obtained by the ABC11 I-Team.
The agency filed a report of ‘fraud / false pretense or swindle’ with the Raleigh Police Department the same week. The police report obtained by the I-Team further describes the incident as “money via wire transfer to a fraudulent account.”
NCHFA declined to share further information referencing an ongoing investigation by a federal agency. NCHFA did state, “We have no reason to suspect an employee was involved.” The federal office declined to confirm the investigation.
NCHFA is a state agency that works to provide affordable housing for North Carolinians. The organization utilizes federal and state funds to finance affordable homes and apartments, offers down payments, administers rental assistance contracts, and assists with foreclosure prevention and access to housing counseling services. It also sells bonds and administers tax credit programs.
“Issues like this come up from time to time. And I’m extremely confident that the Housing Finance Agency program is intact and fully confident that the executive director of that agency, working with law enforcement officials, are trying to figure out what happened, get it right and keep it right,” explained North Carolina State Treasurer Dale Folwell.
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Folwell oversees the state’s finances as the state treasurer and also sits on the Board for The Housing Partnership, which oversees the NC Housing Trust Fund that is managed by NCHFA.
Folwell said he is confident that the funds can be recouped and do not impact the agency’s ability to provide affordable housing assistance.
“It can be recouped and recaptured, sometimes people actually commit these frauds and they leave the money in the account. We’ve actually had that happen not as often as we’d like, but also this agency, Housing Finance Agency, is protected from this type of fraud as far as insurance is concerned,” he said.
The I-Team uncovered this isn’t the first time that how the agency handles its finances have been questioned.
Two federal audits found issues with how NCHFA spent federal money allocated to help prevent homeowners from eviction.
In 2017, the agency was one of 10 called out by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); a federal law enforcement agency that targets crime at financial institutions.
The audit found NCHFA spent $107,000 on barbecues, parties, gift cards, flowers, cash bonuses and gym memberships.
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Another audit in 2019 by the same federal agency uncovered NCHFA spent another $130,000 on housing conferences utilizing money from the federal Troubled Asset Relief Program (TARP).
“Before homeowners received a single dollar from HHF, housing counselors were treated to an evening reception featuring a carved beef station staffed by a uniformed chief, cake bites and strawberry shortcake martinis, and season fruits and berries. The North Carolina agency charged TARP $3,130. Later, a guest speaker lectured on ‘Motivation by Chocolate’ at a cost of TARP $2,500,” the audit stated.
Later in 2020, North Carolina-based reports brought scrutiny to NCHFA.
The NC Program Evaluation Division, a nonpartisan unit created by the NC General Assembly, reviewed NCHFA and found it could improve its effectiveness and oversight.
The series of reports pointed to the agency’s independence from state policies and controls leading to an increase in risk for “wasteful or unnecessary expenditures.” Additionally, the review found there is little oversight for the agency, which has led to improper use of funds.
Part of the NC Program Evaluation Division recommendations included that state lawmakers improve oversight of NCHFA and clarify laws so the agency was not exempt from state budget requirements.
“The executive director took that report very seriously. And as I said earlier, they’re completely focused on figuring out what’s right, getting it right and keeping it right for the future,” Folwell said. “Any time that anyone brings a new information or a better way of looking at old information that can make all of us better stewards of the taxpayer money I welcome that, and I’m sure they do also.”
A spokesperson for NCHFA told the I-Team “Those reports are more than three and six years old respectively and we addressed both when they were issued and have no further comment. The theft you referenced was perpetrated against the Agency and is in no way related to those old reports.”
The potential theft from NCHFA represents 83% worth of state funds and property that was reported damaged, misused, or stolen already in 2023.
The NCHFA has not reported any other incidents to the SBI since 2012, according to data that lists cases of misuse, damage, and theft of state property and funds.