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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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.


Yep! New inovative welfair line : )