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Siemens settles Michigan HUD case for $1M 

Accused of falsifying energy efficiency data in Detroit suburb’s public housing

Siemens settles alleged HUD violations for $1M
Roland Busch of Siemens (Wikipedia/Siemans Portugal, Getty)

A contractor has agreed to pay a little over $1 million to settle possible False Claims Act violations related to two federal public housing facilities in a suburb of Detroit. 

Siemens Industry agreed to pay the settlement for violations dating back to a 2011 contract with the Hamtramck Housing Commission, a HUD-funded public housing authority, to install energy efficiency improvements at two public housing facilities, according to a news release from the U.S. Attorney’s office.

Siemens calculated the amount of energy savings the improvements would deliver. The Hamtramck Housing Commission submitted records to HUD using data from Siemens’ analysis.  

The settlement, according to the release, “resolves allegations that Siemens relied on inaccurate data in its analysis, which led to the United States paying a larger annual subsidy to the Hamtramck Housing Commission than it otherwise would have.”

The allegations came to light because of two whistleblowers, Kevin Kondrat and Jessica Jones, who worked for the local housing authority.

“Federal contractors are expected to deal honestly with federal agencies, even where there are intermediaries between the agency and the contractor,” U.S. Attorney Dawn Ison said. 

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Last week, David L. Merryman, 58, who owns more than 60 rental properties in Virginia, was accused of defrauding the government and tenants through false representations. 

To secure housing-assistance payments from HUD, Merryman allegedly made repeated false claims about the condition of his properties. Additionally, he is accused of submitting fraudulent applications for rent-relief benefits during the COVID-19 pandemic by stealing tenants’ identities and forging signatures. 

While obtaining significant sums, Merryman allegedly evicted tenants for unpaid rent without informing them.

Merryman’s alleged fraud extended to deceiving tenants for financial gain. The indictment alleges that he obtained money and property from tenants under false pretenses, promising property repairs or reimbursements that he never intended to fulfill, prosecutors said. This deceptive pattern involved demanding significant upfront fees or deposits, subjecting tenants to discriminatory practices, and cycling through new tenants, they allege.

The charges against Merryman include 10 counts of wire fraud, four counts of interfering with housing rights, two counts of interstate communications with threats to injure, six counts of theft of government money, four counts of making false statements to HUD, and four counts of aggravated identity theft.

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