Dive Brief:
- A former property director for the Chicago Housing Authority was allegedly given more than $421,000 in kickbacks in exchange for fraudulently awarding a construction company owner more than $4.8 million in building and renovation work at CHA properties, per a June 9 indictment in the U.S. District Court, Northern District of Illinois, Eastern Division.
- The indictment accuses Ryan Ross, formerly a director in the CHA’s Property and Asset Management Department, of receiving the funds in 2023 and 2024 from Vanessa Rhodes, president of Chicago-based Bell’s Better Buildings, which did business as Twenty Eleven Construction.
- In exchange, Ross used his official position to steer contracts to that firm and another company affiliated with Rhodes, the indictment alleges. Multifamily Dive reached out to Ross and Rhodes for comment but did not hear back by publication time. An indictment formally begins the criminal prosecution process, but is not evidence of guilt.
Dive Insight:
The indictment charges Ross, 50, of Bolingbrook, Illinois, and Rhodes, 47, of Chicago, with eight counts of honest services fraud, each punishable by up to 20 years in federal prison, according to a June 9 press release from the attorney general’s office for the Northern District of Illinois. Arraignments in federal court in Chicago have not yet been scheduled.
The CHA, the third-largest public housing agency in the nation, develops and operates housing throughout the city for low-income families, the elderly and people with disabilities, primarily via federal funds from HUD. However, it has experienced turmoil in recent years.
The agency was without a top leader for a year and a half until Keith Pettigrew, former head of Washington, D.C.’s housing authority, was named CEO in April despite objections from Chicago Mayor Brandon Johnson, WTTW reported. Residents also filed a lawsuit accusing the CHA of violating the state Open Meetings Act when it voted in March to appoint Pettigrew.
As part of his role at the agency, Ross oversaw CHA property managers and worked with them to make units ready for new residents, selected vendor-companies for this unit-turn work and approved invoices.
Ross and Rhodes concealed their scheme — including Ross’s financial interest in the unit-turn work he awarded to Twenty Eleven Construction and the affiliated company — by submitting false documents to the CHA, including proposals, scopes of work and invoices, the indictment claims. Ross and Rhodes also allegedly caused Rhodes’s husband to falsely represent himself to CHA property managers as an employee of the affiliated company who would complete the work on CHA units.
Less than two years ago, Ross was fired for violating CHA’s procedures, including one that cost the agency more than $19,000 in unnecessary expenses for construction work, the Chicago Sun-Times reported.
Andrew Boutros, U.S. attorney for the Northern District of Illinois; Machelle Jindra, special agent in charge of HUD’s Office of Inspector General; and Kathryn Richards, inspector general of the CHA, announced the indictment.
Corruption in the awarding of public housing contracts undermines trust, distorts competition and diverts scarce resources, Boutros said in the release.
“Holding individuals accountable when they exploit their positions for personal gain is essential to protecting the integrity of our public institutions, ensuring that taxpayer funds are properly safeguarded, and making sure that everyday people in need of public housing assistance get the support they are entitled to under the programs,” Boutros said.
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