Sandusky housing scandal unabated

Nearly a decade after 60 homeowners got ripped off, still no answers in estimated $3 million government contracting scheme
Andy Ouriel
Mar 25, 2013


The federal grant money is made available to cities across the country to assist homeowners in making upgrades and emergency repairs. The Community Housing Improvement Program is designed to help local governments protect a city's housing stock and protect against letting neighborhoods deteriorate and allowing homes to become abandoned and in disrepair.

Sandusky's CHIP program became rip-off center in the mid-2000s, however, with city-approved contractors taking the money but failing to make repairs, and in dozens of instances, damaging the homes, some beyond repair, and forcing homeowners out of their dwellings.

The city did not respond to complaints from the homeowners for years, and not until after a front-page story about the corrupt practices was published in the Register. After the story published the city finally did take action, spending almost $1 million in local tax funds to repair the damages to the homes caused by the city-approved contractors.

The corruption made the city ineligible for CHIP federal dollars for several years, adding up to a loss totaling about $3 million in funds and penalties. No final accounting of the losses was ever provided by the city of the federal government.

There never was a local criminal investigation despite the losses, and a federal probe, after all these years, remains unresolved and undisclosed.

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Somebody needs a slap on the ole wrist!


After the "storu" and "lacal" tax funds. What an award winner we have here.

Matt Westerhold

Thanks CitySlicker. You might be missing the bigger picture, perhaps, failing to see the forest though the trees, as it were. But nice catch. 

The Bizness

Admit it, you have terrible editors.

BW1's picture

The problem, Matt, is that with enough of these careless errors, the potential arises to change the nature of the forest, or the meaning of the article. There's a book on the value of punctuation titled for the difference a few errant commas make in the meaning of a description of pandas - Eats, shoots, and leaves.

If your vaunted journalists can't master the basics of their trade, then there is no reason to trust any aspect of their reporting. Would you entrust your car to a mechanic who didn't know how to use a socket wrench?


Funny comment about the typo's.
I am not a journalist but can spell better than that. Or at least hit the spell check button.


government and scandal in the same sentence. Say it aint so....(insert major sarcasm)

The Bizness

Money and scandal in the same sentence. Say it aint so...(is what you should have put)

This is not just a government issue but it happens in both public and private sectors and should be dealt with.

BW1's picture

No, it'a endemic in government programs, and more insidious because of the coersion element. The private sector does not obtain its funds at gunpoint. The private sector is accountable to those from whom the money comes, because they have the option not to invest or purchase. Those who choose not to invest in government go to prison.

The Bizness

I do understand your point but...

I completely disagree. Money = corruption in private and public sectors. It is just a money issue.

Hell these contractors are private business and they were being just as corrupt as the government running it.

BW1's picture

Because, again, their customer is the government, which has no reason to be careful with its money, because it obtains it coersively.

Even if a private business is corrupt, its customers have a choice to take their business elsewhere. If they don't take that choice, then it's just another parting of fools from their money.

Are you penniless? No? Then by your own reasoning, you are corrupt.

Darwin's choice

So anyway, why hasn't the local prosecutor, who was in office at the time, done any prosecuting? Oh, thats right, he's above all that!

Julie R.



I agree. Ohio state laws were broken. The county prosecutor should have called in the Ohio Attorney General to investigate. Instead the investigation was farmed out to a private attorney. How much money did Sandusky, Ohio lose in total of misused CHIP money, the city using city taxpayer funds to redo the shoddy workmanship, lawsuits by home owners, pay private attorneys for investigation and of course the city missing out on future CHIP grants? How much was the total loss to the city, its taxpayers and the affected home owners?


At least when the corruption is private, someone goes to jail or pays a fine and if your money was involved, you can opt out of doing business with them. Unfortunately when its the government, I can't simply ask for my tax dollars back. They have you by the balls.

The Bizness

I agree, unless you were in Cuyahoga county government the past 10 years


You're exactly right, arnmcrmn.

Those who suggest that there is corruption in the private sector as well as government are right. Where there's money, there's always SOMEbody who's greedy enough to cheat or steal to get more of it! But bad businesses go out of businesses. Bad businessmen (-women) pay fines, go to jail, declare bankruptcy, or are unemployed. Bad government just demands more tax gunpoint.


I know exactly where the forest is. I may appear to be nit-picking over stupid errors. The reason being, is that this paper never misses a chance to explode someone's simple mistake, and make it headlines forever and a day. I do read the complete articles on here before a comment. If I miss something that was in the printed paper, it's only because I use my money for better things than that.

Matt Westerhold

Thanks Cityslicker. Perhaps you consider a $3 million loss in funding a "simple mistake," and support the fact there was never any local criminal investigation to hold those responsible accountable for the losses. Thank you for reading the free content at and offering your opinions in an anonymous way.  

Darwin's choice

Really, Matt? I didn't take his reply as the 3 million $ loss is a "simple mistake", nor any support for the lack of a criminal investigation. He did, however, make a good point about the lack of "professional journalism 101" spell checking. Please list the "players" who were in power when this farce was in play, lets make someone responsible!


A loss of $3 million is NOT a "simple mistake" as Cityslicker has stated otherwise.


Just curious - but while you are on the subject of grammar.... Do you mean exploit or explode? :-) A note to the register - the correct grammar is the difference between knowing your s..t and knowing you're s..t


List the contractors names, Yes, they change the name of their companys ,so they can continue to do poor repairs, still it would be nice to have a heads up.

"Sloppy paperwork, incomplete projects andmismanaged funds."
"The city contracted Mike Murman and Associates to conduct an investigation."
"While the city works to rebuild its housing department, homeowners who suffered the consequences of the program's shortcomings are building their case."
"The city hired Murman and Associates of Lakewood to investigate the program. The investigation cost the city more than $28,000 in legal fees to be paid from Department of Development funds."
"Rat infestations, dangerous electrical wiring, exposed lead paint and roofs leaking like sieves. Those are just a few of the problems facing homeowners who were failed by the city's Community Housing Improvement Program."
"Dozens of local families are working to rebuild their lives after being victims of the city's failed Community Housing Improvement Program."
"City officials say that between 2004 and 2006, Mark Warren, the man in charge of Sandusky's CHIP program, robbed the city of hundreds of thousands of dollars -- maybe more."
"Between 2004 and 2006, the city's Community Housing Improvement Program, or CHIP, was rocked with scandal. City housing officials stole hundreds of thousands in grant funds from the city, while providing shoddy repairs or no repairs at all to city residents."
"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."
"Sandusky officials said a criminal investigation into shoddy home repairs is ongoing, but they know nothing about the progress."
"The Office of the Inspector General began its investigation into the city's housing scandal in 2008,"
"As of April 28, the city has been billed $6,750 by Murman andAssociates for the investigation into the Sandusky police department and $28,100 for the investigation into the Department of Development CHIP program."

Private attorneys love Sandusky, Ohio. I could go on with links about Sandusky, Ohio and its failed CHIP program. Why does Sandusky, Ohio keep farming out investigations to private attorneys?


Funny, Gennycreamale,you may know how to spell check, but you may also want to use the correct placement of an apostrophe. If you are mentioning typos in the plural sense of the word, yes there are a couple of typos. There is no apostrophe necessary, unless you are indicating the possessive sense of the word, as in "Typo's mama didn't teach him punctuation."
But I think most people know what you meant, as well as what the article meant. If you live in glass houses, you shouldn't throw stones.

2cents's picture

If I remember correct many of these contractors came out of nowhere because a majority of the funds we set aside for a special type of contractor! Qualifying for the work was based on something other than experience. I guess you get what you ask for!

Darwin's choice

So, where is Mark Warren?

"Don Icsman distributed a written summary from Beth Snyder regarding the city’s 2004, 2005 and 2006 CHIP programs. Don Icsman said the president of ORDC was unavailable this evening, but because of the importance of this topic, he asked Beth Snyder to attend and provide a recap. Don Icsman said the inspections for years 2004, 2005 and 2006 have been completed as well as reconciliation with the State of Ohio by the city’s finance director and he is awaiting confirmation from the inspector, Mr. Saunders. He said he believes the CHIP program is close to being completed with respect to these grant years. Don Icsman said there are still a couple of CDBG homes which are not yet completed because of weather conditions. He said the original files are in the office of the inspector general in Cleveland. Don Icsman said when the CDBG homes are completed, the state will not be inspecting them and this will be left up to the city’s building official, along with ORDC, to complete."


So where is Mark Warren now? Probably scot-free. Ridiculous.

"Don Icsman provided an update on the housing program as the city received the monitoring release for the 2006 Community Housing Improvement Program (CHIP) from the Ohio Department of Development. He said 2006 is the final year the city was waiting for a release and has already received the 2004 and 2005 releases/reports. Don Icsman said these reports indicate the homes have been satisfactorily repaired, inspected and audited by the State of Ohio. He said the city continues to provide other housing services and indicated Carrie Handy will provide a summary of these services."

"Don Icsman said the city’s position regarding the investigation has been consistent since the beginning; the individuals involved were suspended and the program was closed down. He said the files were sealed and the investigation was initially being conducted by the city, but was taken over by the federal government. The commission has done what was necessary to make these problems right and those who were victimized have been made whole. He said the inspector general’s office is conducting an ongoing investigation and he does not know where it will end up. He said the results of the investigation will be an invaluable tool and this should not have been done by the city as it is still unknown who may be implicated. He said the city has filed a claim with its insurance company and will be able to move forward once the investigation is complete."

Family sues Sandusky, CHIP program under federal racketeering law
"The lawsuit, filed in Erie County Common Pleas Court this past week, lists four defendants: the city of Sandusky; former city housing employee Mark Warren; contractor New Horizon Development; and New Horizon owner Steven Strang.

The complaint accuses the defendants of breach of fiduciary duty, breach of contract, violations of the Ohio Consumer Sales Act, unjust enrichment and violations of RICO.

RICO, or Racketeer Influenced and Corrupt Organizations Act, is a decades-old statute most often used to prosecute organized crime syndicates."


We were not living here at the time this went on, but my question is, why were building inspectors not sent out to "inspect" the work before any funds were released to these workmen?

I would think that would have been a necesarry step before any funds were released to anyone doing work on any structure within the Sandusky City limits, especially funds being handed out from special sources such as Federal, State or City funding.

Didn't these people fill out paperwork or obtain permits to get this work done? Isn't it customary to get one half the money at the start of the work and the remainder at the finish of the job after inspection?

If so, why were these jobs not inspected before the funds were released?


From the subject content to the attitude of local media's mistake, it displays much of America's mindset.

2cents's picture

Yep! New inovative welfair line : )