TC Palm
February 4, 2010

Federal criminal investigation launched into allegations of corruption in Fort Pierce City Hall

By Alexi Howk

FORT PIERCE – The U.S. Department of Housing and Urban Development has launched a criminal investigation into allegations of corruption in the city’s Community Services division, City Hall announced late Thursday.

A special agent from HUD’s Office of the Inspector General met with City Manager David Recor Thursday to inform him of the investigation and indicated the FBI might also assist in the investigation, according to a City Hall news release.

Recor said the city would fully cooperate with the investigation and offered assistance from investigative resources in the Fort Pierce Police Department.

The Community Services Department administers state and federal dollars to assist low-to-moderate income families in obtaining affordable housing, as well as provides money for rehab work on homes.

The investigation comes after a forensic audit conducted by Kessler International of New York City, a company that specializes in uncovering white-collar crimes and corruption, called Community Services “a corrupt organization” that used state and federal housing money for the benefit of employees, friends and relatives, while other qualified applicants were put on a waiting list.

The audit also cited acts of “theft,” “fraud,” and “cronyism.”

Recor ordered the $15,580 audit after questions over suspicious mortgages issued to city employees, one of which worked in the Community Services division and received money from a program she helped implement, became public.

Last week, Recor referred the Kessler audit to the U.S. Attorney’s Office, Florida Department of Law Enforcement and the State Attorney’s Office to determine if any criminal charges should be filed.

Recor said the city’s current and future federal entitlement dollars do not appear to be at risk “in large part due to the city’s swift action and immediate communication with the HUD regional office in Jacksonville regarding the city’s future plans.”

To demonstrate its commitment to changing “business as usual,” at City Hall, the city is reviewing its organizational structure and evaluating alternative approaches to traditional services provided by Community Services, the release states.

Recor shut down the Community Services Department earlier this week and put all full-time Community Services employees on administrative leave with pay. He also let all temporary employees in the department go.

Recor said services in the department would remain at a standstill until the city conducts its own internal review of programs and determines how to restructure the department.

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