WSVN — 7News first reported the Housing Authority in Lauderhill was giving loans to its employees. And tonight, that agency is now under investigation. 7’s Carmel Cafiero is back on the case.

When the housing market crashed in 2007, it hit cities hard. The federal government threw communities a life raft: $6.8 billion in emergency funding.

The city of Lauderhill’s share of the neighborhood stabilization program was more than $5.7 million.

Carmel Cafiero: “The plan was for local governments to purchase and fix up foreclosed and abandoned properties and resell them to qualified buyers. But now, years later, there are questions about who that money helped here in Lauderhill.”

Lauderhill put its housing authority in charge of rehabbing and selling the properties, and they did sell homes, sometimes to each other.

The program has helped 48 people, 11 of them city and housing employees who received grants ranging from $9,000 to $44,000.

The money, which added up to more than $300,000, was used for down payments, repairs and closing costs, and it does not have to be paid back.

In addition, the employees received financing for their homes, more than $1 million total.

The Housing Authority says, by financing the homes, they will actually make money to buy and fix more homes.

Carmel Cafiero: “Ms. Saunders, Carmel Cafiero from Channel 7. I’d like to talk to you about your loan.”

In November, 7News first revealed the Housing Authority’s deputy director Julie Saunders and its executive director, Kennie Hobbs, both benefited from loans through the organization they help run. At the time of his purchase, Hobbs, who is also an assistant city manager, had a private mortgage on a $400,000 house.

The Housing Authority then loaned him $375,000 to buy a second home just blocks away.

Carmel Cafiero: “You don’t find a conflict of interest in that you borrowed that money?”

Kennie Hobbs: “No, it was approved by the board, which is required.”

Saunders was loaned $318,000, making the two employee loans the largest through the Housing Authority. The city manager stresses their loans were not funded through the grant program.

Charles Faranda: “The funding for that came specifically from the employee part of the contribution towards their own pensions.”

At a commission meeting, Lauderhill resident Mae Smith raised concerns about the lending following our first story.

Mae Smith: “In light of what’s been on the news, and as stated before, it definitely doesn’t pass the smell test.”

But city leaders insist there was no misuse of funds.

Mayor Richard Kaplan: “I don’t even understand the significance between is it a city or not a city employee. If a non-city employee came in and said, ‘I want to buy a Housing Authority property,’ and they also got a mortgage back from the Housing Authority, what you’re doing is employment discrimination, as far as I can tell.”

City Manager Charles Faranda: “There is no wrongdoing. We followed the policies, so I don’t understand.”

Yvon Dorcinvil is the Lauderhill Housing Authority’s chairperson. He also works in the WSVN engineering department. He declined an on-camera interview, but at the meeting, he defended the employee lending program.

Yvon Dorcinvil: “I think it’s great cause. Not only do they live here; they spend money here, they pay taxes here.”

The Broward Inspector General’s Office and the Broward State Attorney’s Office will now determine if it’s a great cause. Both agencies are reviewing Lauderhill’s lending.

City officials say there are still homes and assistance dollars available in Lauderhill and that “…employees in the program did not prevent any qualified applicants from receiving assistance.”

It will now be up to investigators to lend their voice to the matter.

Carmel Cafiero, 7News.

Miami-Dade: 305-627-CLUE
Broward: 954-921-CLUE
You can also send a tweet to @carmelonthecase.

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