The federal government is investigating former city employee Mark Warren.
On April 1, the Office of Inspector General for the U.S. Department of Housing and Urban Development issued a subpoena to city officials to turn over "any and all documents" relating to the Community Housing Improvement Program.
According to Carrie Handy, the city's chief planner, the government confiscated 30 boxes of files later that month.
Although the federal agents gave the city enough time to inventory the documents, there wasn't enough time to make copies, she said.
Since that time, the Inspector General's office also has subpoenaed company files from at least three of the seven contractors who worked with Warren on the CHIP program.
Both federal and city officials confirmed an investigation is ongoing, but officials couldn't give a timetable when charges might be brought.
"We'd rather it be sooner than later," said Don Iscman, the city's law director. "But (the Inspector General's office) is shorthanded and short-staffed like everyone else. ... I expect it might be a while longer."
According to Handy, Warren and the contractors stole hundreds of thousands of dollars from the city -- possibly more.
Between 2004 and 2006, the city received $1.5 million in CHIP grants, as well as $500,000 in Community Block Development Grants.
The city had to give $63,000 in funds back to the government, but the other $1.937 million was used for the housing programs.
Handy said the contractors charged the city for unnecessary and expensive projects -- which Warren, the city's housing rehabilitation specialist, approved -- and then provided shoddy work or no work at all to the houses. Nearly every house -- and possibly all of them -- received inadequate work, she said.
"You went to the houses, and you wondered if these people even knew what straight lines were or what right angles were," she said.
The seven contractors involved in the program were New Horizon Development, Porter Home Improvement, Helmstetter Home Improvement, Girasol Remodeling, Allicock Construction, E & M Remodeling and Boger Quality Builders.
Handy, who had to provide significant evidence to government officials before they would take the case, said all seven contractors provided suspect work.
Nonetheless, she couldn't say whether they were all involved in a scam to steal money from the city, or they were just incompetent.
In one instance, a contractor ignored a faulty foundation "and the house could have caved in," she said. Instead, they replaced relatively new windows with cheaper windows and charged the city an exorbitant amount of money.
They billed $700 for a water heater at one home and $2,700 for a water heater at another home.
Victoria Irby sued the city -- and the suit is still pending -- because she needed a $1,200 repair for her roof and ended up receiving $25,000 in shoddy repairs, including a whole new roof. Her roof now leaks worse than ever.
"What they really did is hurt the homeowners," Handy said, because the homeowners have to pay the government back when they sell their houses. If they stay in their houses five years, then they only have to reimburse the government for 50 percent of the repairs. But for someone like Irby, that is $12,500.
The Inspector General's office couldn't "confirm or deny an ongoing investigation," but the subpoenas indicated an investigation was ongoing, Iscman said.
According to Ohio Revised Code Sections 2913.02 and 2929.14, if Warren is found guilty of embezzling more than $500,000, he would face two to 10 years in prison.
But a federal official said defendants often make deals in cases like this. Warren could name contractors who have violated the law, he said, and in return he could receive a reduced sentence.