DuPage housing head: Criminal charges likely

Someone could face criminal charges in the wake of a financial scandal that has the DuPage Housing Authority owing millions of dollars to the federal government.

The authority’s interim director made the revelation to DuPage County Board members Tuesday after informing them that local and federal authorities are conducting an investigation of the embattled agency.

“The housing authority is expecting some criminal charges to be filed very shortly on a particular person,” Cathy Ficker Terrill told the board. “That’s as much as I can tell you at this time.”

Terrill has been overseeing the Wheaton-based housing agency since county board Chairman Dan Cronin forced the resignation of Executive Director John Day in March. Day’s deputy, Robert Hess, also retired after Cronin learned about two audits critical of the agency by the U.S. Department of Housing and Urban Development.

Cronin unseated all members of the housing authority board when a third audit charged the agency improperly spent more than $5.8 million in federal money and failed to adequately document another $4.7 million. Unlike the two prior reports, this one specifically called for the repayment of nearly $5.1 million in misspent federal funds.

Cronin said as soon as he learned about the audits he asked the state’s attorney’s office to get involved. The FBI has since joined the probe.

“I am glad law enforcement is in there,” Cronin said. “I encourage the investigation to be as thorough and complete as it should be.”

In the meantime, Terrill said she wants to know how deep the problems run at the agency. She said she has asked HUD officials to do a review next month of the housing authority’s operation.

“I decided we needed to have a comprehensive picture of all of the problems so we can develop a comprehensive plan for all of the solutions,” she said.

So far, there have been several changes made at the housing authority, including reorganizing the staff and clarifying lines of authority. Terrill said she is also working toward establishing financial controls. “There were none,” she said.

The authority is planning to submit a corrective action plan to HUD on May 7. The biggest issue that must be addressed is how the authority is going to comply with the requirement to repay millions of dollars from “nonfederal” sources. Most of the agency’s budget comes from the federal government. It receives about $23 million a year in HUD assistance and has limited amounts of cash in its nonfederal accounts.

“Less than 10 percent of our budget is nonfederal funds,” Terrill said. “It would take forever to pay off this debt.”

Despite the agency’s financial woes, Terrill said HUD officials have made assurances that they “will protect the low-income people of DuPage County.” She said individuals who receive housing assistance won’t have that aid compromised.

In the meantime, seven new members were appointed Tuesday to the housing authority board. Appointed to the unpaid positions were: Michael Brosnahan of Naperville, Kathleen McGowan of Naperville, Thomas Banaszak of Downers Grove, Sherrin Ingram of Downers Grove, Mary Alice D’Arcy of Lombard, Thomas Good of Wheaton and John Berley of Wood Dale.