SF calls on FBI to probe “criminal activity” at nonprofit housing agency

The City of San Francisco has tipped off the FBI about a publicly funded nonprofit agency it accuses of improperly collecting rents from formerly homeless tenants.

The city alerted the FBI and the San Francisco District Attorney’s white collar crime division about potential wrongdoing by the United Council of Human Services, the San Francisco Chronicle reported.

“The Controller’s Office and the City Attorney’s Office will support any investigation you think appropriate,” a letter to both law enforcement agencies stated.

The nonprofit, based in Bayview, controls $28 million in public funds to provide housing to formerly homeless residents. It runs shelters, a drop-in resource center and a safe camping site.

The decision to alert law enforcement followed an audit report by the Controller’s Office that urged San Francisco to consider firing the agency for not complying with city agreements.

This week’s audit unveiled “broad noncompliance” by the United Council in determining tenant eligibility, calculating applicant income, hiring staff, collecting rent and keeping accurate records.

It also found that the United Council stood by while access to housing was “illegally sold” to some residents.

“Although the individuals responsible may not have been UCHS employees, it appears that UCHS was aware of the criminal activity and did not initially report it to the funding department,” the Nov. 17 letter said.

The audit report drew the same conclusion as an audit in 2017, which found the nonprofit had waylaid expenditures, according to the Chronicle.

Because of the last audit, the city’s Department of Homelessness and Supportive Housing tapped a fiscal sponsor, Bayview Hunters Point Foundation, to dole out $36.4 million in grants to alleviate homelessness — most of which goes to the United Council of Human Services.

This year’s auditors studied a sample of 29 tenants enrolled in United Council programs.

Two dozen of the tenants hadn’t gone through the city’s entry process — which guards against favoritism — and lacked documents to show they were eligible for supportive housing. The incomes of 19 tenants were calculated incorrectly.

And three tenants were employees of the nonprofit agency who’d bypassed the entry process and lacked documents to show they were eligible. One was living in an apartment intended for homeless veterans.

In one case, the United Council collected nearly $109,000 in rent from tenants from March through August, though the organization shouldn’t be collecting rents and kept the money, according to the audit.

The Controller’s audit found the nonprofit failed to provide invoices for thousands of dollars paid on its American Express card, making it hard for the foundation to get reimbursed.

Auditors also accused the city’s Department of Homelessness and Supportive Housing of failing to oversee its nonprofit contractor, while not knowing how many people lived in its three federally funded housing complexes.

Gwendolyn Westbrook, CEO of the United Council of Human Services, could not be reached for comment by the Chronicle. In a response submitted with the audit, she said her agency had been “a reliable partner and steward” of public funds, and that the audit’s findings are based on “a small fractional review” of client files.

Westbrook, a major contributor to political campaigns for Mayor London Breed and Supervisor Shamann Walton, served as a senior manager assistant for the city’s port in 1997 when she was charged with embezzlement and grand theft for allegedly stealing thousands of dollars in parking lot collections.

Supervisor Catherine Stefani tweeted the United Council was “fleecing” the city while taking advantage of vulnerable people it purports to serve.

— Dana Bartholomew

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