The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General (OIG) performed a review of The Retreat at Church Ranch bank records based on our audit conducted of the project. Our review disclosed that the owner allegedly made payments for personal expenses from the project’s bank account. We requested that HUD pursue proceedings against the owner.
On March 31, 2015, HUD filed a complaint seeking more than $12.9 million in civil money penalties against the owner. The owner denies HUD’s allegations. However, to avoid the uncertainty of litigation and to arrive at a settlement that was satisfactory to both parties, the parties negotiated in good faith and reached a settlement in which the owner will pay HUD $500,000.