oversight

Wood Hills Assisted Living Facility; Kalamazoo, MI; Multifamily Equity Skimming

Published by the Department of Housing and Urban Development, Office of Inspector General on 2005-01-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

              AUDIT REPORT




       WOOD HILLS ASSISTED LIVING FACILITY
         MULTIFAMILY EQUITY SKIMMING

             KALAMAZOO, MICHIGAN

                    2005-CH-1005

                 JANUARY 12, 2005




               OFFICE OF AUDIT, REGION V
                   CHICAGO, ILLINOIS



Exit                                       Table Of Contents
                                                                Issue Date
                                                                             January 12, 2005
                                                                Audit Report Number
                                                                         2005-CH-1005




TO:       Barbara Chiapella, Acting Director of Detroit Multifamily Housing Hub, 5FHMLA
          Margarita Maisonet, Director of Departmental Enforcement Center, CV
          John W. Herold, Associate General Counsel for Program Enforcement, CE


FROM:     Heath Wolfe, Regional Inspector General for Audit, 5AGA

SUBJECT: Wood Hills Assisted Living Facility; Kalamazoo, MI; Multifamily Equity
           Skimming of More Than $500,000 in Project Assets

                                  HIGHLIGHTS

 What We Audited and Why


            We reviewed the books and records of the Wood Hills Assisted Living Facility
            (Project), a 60-bed assisted living facility in Kalamazoo, MI. The review was part
            of our effort to combat multifamily equity skimming. The review was also part of
            our nationwide review of nursing homes due to the increasingly high default rate
            and number of Federal Housing Administration (FHA) insurance claims being
            paid under the Section 232 program. We chose the Project due to its default
            status and more than $500,000 write-off of bad debt reported in its fiscal years
            2001 and 2002 audited financial statements.

            Our review objective was to determine whether the owner/management agent
            used Project funds in compliance with the Regulatory Agreement and the U.S.
            Department of Housing and Urban Development’s (HUD) requirements.

 What We Found


            The owner of the Project, Wood Hills Limited Partnership, had inappropriately
            disposed of $518,633 in Project assets as of December 31, 2002, without obtaining
            HUD approval and in violation of its Regulatory Agreement. The Project was in a


  Exit                                                                             Table Of Contents
           nonsurplus cash position and in default of its FHA-insured loan at the time of the
           disposition.

           Wood Hills Limited Partnership also inappropriately loaned $12,885 of Project
           funds to Wood Hills LP, Inc., the identity of interest operator of the Project. The
           Project was in a nonsurplus cash position and/or in default at the time the Limited
           Partnership made the loans.

           HUD incurred a loss of $1,024,653 on the sale of the Limited Partnership’s
           mortgage note.

What We Recommend


           We recommend that HUD’s Acting Director of Multifamily Housing Hub, Detroit
           Field Office, ensure that Wood Hills Limited Partnership reimburses HUD’s FHA
           insurance fund $518,633 for the inappropriate disposals cited in this report. We
           also recommend that HUD’s Acting Director, in conjunction with HUD’s Office
           of Inspector General, pursue double damages remedies if the Limited Partnership
           does not reimburse the insurance fund for the inappropriate disposals.

           We also recommend that the Director of HUD’s Departmental Enforcement
           Center and/or HUD’s Associate General Counsel for Program Enforcement
           pursue action under the Program Fraud Civil Remedies Act against Wood Hills
           Limited Partnership’s General Partner and impose civil money penalties and
           pursue administrative sanctions against the Limited Partnership and its owners.

           For each recommendation without a management decision, please respond and
           provide status reports in accordance with HUD Handbook 2000.06, REV-3.
           Please furnish us copies of any correspondence or directives issued because of the
           audit.

Auditee’s Response


           We provided our discussion draft audit finding to Wood Hills Limited
           Partnership’s Resident Agent and HUD’s staff during the review. We held an exit
           conference with the Resident Agent and HUD’s staff on November 9, 2004.

           We requested Wood Hills Limited Partnership to provide comments on our draft
           audit finding by November 16, 2004. The Partnership’s Resident Agent provided
           written comments dated November 14, 2004. The Agent agreed with our finding
           that the Partnership wrote-off the Project’s assets. However, the Agent disagreed
           that the Limited Partnership loaned Project assets to Wood Hills LP, Inc. Further,
           the Resident Agent did not agree with our recommendations. We included the
           complete text of the Resident Agent’s comments in appendix B of this report.


 Exit                                                                            Table Of Contents
                                             2
             TABLE OF CONTENTS


Background and Objectives                                                          4

Results of Audit

      Finding 1: Wood Hills Limited Partnership Inappropriately Disposed of More   5
                 Than $500,000 in Project Assets

Scope and Methodology                                                              9

Internal Controls                                                                  10

Appendixes
   A. Schedule of Ineligible Costs                                                 12
   B. Auditee Comments and OIG’s Evaluation                                        13
   C. Federal Requirements                                                         19




  Exit
                                            3
                      BACKGROUND AND OBJECTIVE

Wood Hills Assisted Living Facility (Project) is a 60-bed assisted living facility in Kalamazoo,
MI. The Project was insured under Section 232 of the National Housing Act and its Regulatory
Agreement was executed on July 25, 2000. The Project’s owner is Wood Hills Limited
Partnership. Wood Hills LP, Inc. the identity of interest operator of the Project, is also the
limited partner of Wood Hills Limited Partnership. The Project defaulted on its Federal Housing
Administration (FHA)-insured mortgage in April 2001. The U.S. Department of Housing and
Urban Development (HUD) assumed Wood Hills Limited Partnership’s mortgage note on
September 27, 2002. HUD sold the mortgage note on September 29, 2003, at a loss of
$1,024,653.

The review was part of our efforts to combat multifamily equity skimming. The review was also
part of our nationwide reviews of nursing homes due to the increasingly high default rate and
number of FHA insurance claims being paid under the Section 232 program. We chose the
Project due to its default status and more than $500,000 write-off of bad debt reported in its
fiscal year 2001 and 2002 audited financial statements.

Our review objective was to determine whether the owner/management agent used Project funds
in compliance with the Regulatory Agreement and HUD’s requirements.




  Exit                                                                           Table Of Contents
                                               4
                                 RESULTS OF AUDIT

 Finding: Wood Hills Limited Partnership Inappropriately Disposed of
              More Than $500,000 in Project Assets
Wood Hills Limited Partnership, the owner of the Wood Hills Assisted Living Facility (Project),
had inappropriately disposed of $518,633 in Project assets as of December 31, 2002. The Project
was in a nonsurplus cash position at the time of the dispositions. Further, Wood Hills Limited
Partnership had been in default of its mortgage since April 2001. Wood Hills Limited
Partnership failed to obtain HUD approval for the disposition of Project assets as required by its
Regulatory Agreement. The inappropriate dispositions included $504,038 in delinquent lease
payments and $14,595 in operating advance receivables. HUD assumed Wood Hills Limited
Partnership’s mortgage note on September 27, 2002, and HUD paid Midland Mortgage
Investment Corporation $2,544,664 for the mortgage. The unpaid principal balance of the
mortgage note was $2,619,824. HUD sold the mortgage note to PAMI Atlantic, LLC, on
September 29, 2003, for $1,595,171. The inappropriate disposition occurred because Wood
Hills Limited Partnership did not follow its Regulatory Agreement and lacked effective
procedures and controls to assure Project funds were used appropriately. As a result, fewer
funds were available for debt service, and Project funds were not used efficiently and effectively.
Further, HUD incurred a loss of $1,024,653 ($2,619,824 minus $1,595,171) on the sale of the
mortgage note.


 Wood Hills Limited
 Partnership Improperly
 Disposed of More Than
 $500,000 in Project Assets



               Wood Hills Limited Partnership had inappropriately written off $518,633 in Project
               assets as bad debt as of December 31, 2002. The Project was in a nonsurplus cash
               position at the time of the dispositions. Further, Wood Hills Limited Partnership had
               been in default of its mortgage since April 2001. Wood Hills Limited Partnership
               failed to obtain HUD approval for the disposition of Project assets as required by its
               Regulatory Agreement. The inappropriate dispositions included $504,038 in
               delinquent lease payments and $14,595 in operating advance receivables.




  Exit                                                                               Table Of Contents
                                                 5
Wood Hills LP, Inc. Failed to
Make Lease Payments to Wood
Hills Limited Partnership


           Wood Hills LP, Inc., the identity of interest operator of the Project, failed to make
           $504,038 in lease payments to Wood Hills Limited Partnership from August 2000
           through December 2002. Wood Hills Limited Partnership’s Lease Agreement
           with Wood Hills LP, Inc., dated July 25, 2000, required Wood Hills LP, Inc., to
           make initial monthly lease payments of $27,802. The lease payments were for the
           Project’s mortgage payment, mortgage insurance payment, replacement reserves,
           real estate taxes, and property insurance. Wood Hills Limited Partnership
           inappropriately wrote off $197,480 and $306,558 in delinquent lease payments as
           bad debt on December 31, 2001, and December 31, 2002, respectively.

           Even though Wood Hills LP, Inc., failed to make its lease payments to Wood
           Hills Limited Partnership, Wood Hills LP, Inc., paid its Vice-President, who is
           also the Limited Partnership’s Resident Agent, and its Vice-President’s wife and
           son $184,500 in salaries from January 2001 through December 2002. Wood Hills
           LP, Inc., also paid Assisted Living Associates, LLC, the identity of interest
           management agent of the Project, $190,500 in management fees from August
           2000 through August 2003. Wood Hills Limited Partnership’s General Partner
           and Resident Agent, who each owned 50 percent of Assisted Living Associates,
           LLC, received salary and/or travel expenses from Assisted Living Associates,
           LLC. Further, Wood Hills LP, Inc., paid Fink Associates, LLC, an identity of
           interest marketing firm, $13,500 in marketing fees from April through August
           2003. We believe these salaries and payments of $395,000 were an undue
           enrichment to Wood Hills Limited Partnership’s General Partner, Resident Agent,
           and/or the Resident Agent’s wife and son at the expense of the Project’s financial
           position.

 Wood Hills Limited
 Partnership Inappropriately
 Wrote Off Operation Advance
 Receivables



           Wood Hills Limited Partnership paid $41,961 in Project expenses from July
           through December 2000 that should have been paid by Wood Hills LP, Inc.
           Contrary to the Regulatory Agreement, Wood Hills Limited Partnership also
           loaned $12,885 to Wood Hills LP, Inc., from December 2000 through July 2001.
           The loans occurred while the Project was in a nonsurplus cash position and/or in
           default of its mortgage. Wood Hills Limited Partnership failed to obtain HUD
           approval for the loans. The Project’s fiscal year 2001 audited financial statements
           stated Wood Hills LP, Inc., repaid $40,251 through capital improvements, cash,


 Exit                                                                           Table Of Contents
                                             6
          furniture, and equipment from July 2000 through December 2001. Wood Hills
          Limited Partnership inappropriately wrote off the remaining $14,595 on
          December 31, 2001.

          Further, Wood Hills LP, Inc., did not purchase the furniture included in the
          repayment. Wood Hills Limited Partnership’s General Partner certified in the
          Project’s fiscal year 2001 audited financial statements that the Project had
          $210,241 in furnishings. However, the $210,241 included $11,878 for furniture
          that Wood Hills LP, Inc., did not purchase.

HUD Incurred a Loss of More
than $1 Million on the Sale of
Wood Hills Limited
Partnership’s Mortgage Note


          Wood Hills Limited Partnership had $518,633 less in Project funds to make
          mortgage and Reserve Fund for Replacement payments due to the inappropriate
          dispositions. Further, HUD approved the use of $148,869 from the Project’s
          Reserve for Replacement account to pay for two mortgage payments, operating
          advances, interest on operating advances, and service fees.

          In a September 5, 2002, letter, HUD’s Chicago Regional Office of the
          Departmental Enforcement Center requested Wood Hills Limited Partnership’s
          General Partner have Wood Hills Limited Partnership’s owners or Wood Hills
          LP, Inc., pay $212,075 ($197,480 in delinquent lease payments and $14,595 in
          operation advance receivables), written off as bad debt as of December 31, 2001,
          into the Project’s operating and escrow accounts. HUD’s Departmental
          Enforcement Center also requested the General Partner to submit a payment plan
          between Wood Hills Limited Partnership and Wood Hills LP, Inc., for $245,067
          in delinquent lease payments as of August 1, 2002. Neither Wood Hills Limited
          Partnership’s owners nor Wood Hills LP, Inc., made the $212,075 payment.
          Further, the General Partner did not submit a payment plan for the $245,067.

          HUD assumed Wood Hills Limited Partnership’s mortgage note on September 27,
          2002 and paid Midland Mortgage Investment Corporation $2,544,664 for the
          mortgage. The unpaid principal balance of the mortgage note was $2,619,824.
          HUD sold the mortgage note to PAMI Atlantic, LLC on September 29, 2003, for
          $1,595,171. As a result, HUD incurred a loss of $1,024,653 on the sale.


Recommendations


          We recommend that HUD’s Acting Director of Multifamily Housing Hub, Detroit
          Field Office, ensure that Wood Hills Limited Partnership


Exit                                                                        Table Of Contents
                                          7
       1A. Reimburse HUD’s FHA insurance fund $518,633 for the inappropriate
           disposals cited in this report.

       We also recommend that HUD’s Acting Director of Multifamily Housing Hub,
       Detroit Field Office, in conjunction with HUD’s Office of Inspector General,

       1B. Pursue double damages remedies if Wood Hills Limited Partnership does not
           reimburse the FHA insurance fund for the inappropriate disposals cited in this
           report.

       We also recommend that HUD’s Director of Departmental Enforcement Center
       and/or HUD’s Associate General Counsel for Program Enforcement

       1C. Impose civil money penalties against Wood Hills Limited Partnership and its
           owners for the inappropriate loans and disposition of Project assets cited in this
           report that violated the Project’s Regulatory Agreement.

       1D. Pursue action under the Program Fraud Civil Remedies Act against Wood
           Hills Limited Partnership’s General Partner for incorrectly certifying in the
           Project’s fiscal year 2001 audited financial statements that the Project had
           $11,878 more in furnishings than it actually owned.

       1E. Impose administrative sanctions against Wood Hills Limited Partnership and
           its owners for the inappropriate disposition of Project assets cited in this report.




Exit                                                                           Table Of Contents
                                          8
                         SCOPE AND METHODOLOGY

We performed the review at HUD’s Detroit and Grand Rapids Field Offices and the Project from
April through October 2004. To accomplish our review objectives, we interviewed HUD’s staff,
the Project’s employees, Wood Hills Limited Partnership’s Resident Agent and General Partner,
and employees from Freedman and Goldberg Certified Public Accountants, the independent
public accountant who audited Wood Hills Limited Partnership.

To determine whether the owner/management agent used Project funds in compliance with the
Regulatory Agreement and HUD’s requirements, we reviewed

   •   The Regulatory Agreements among HUD, Wood Hills Limited Partnership, and/or Wood
       Hills LP, Inc.;
   •   HUD’s project files and correspondence related to the Project;
   •   HUD’s Real Estate Management System and Financial Assessment Subsystem information
       related to the Project;
   •   Wood Hills Limited Partnership’s Certificate of Limited Partnership and Limited
       Partnership Agreement;
   •   Wood Hills Limited Partnership’s and Wood Hills LP, Inc.’s financial records;
   •   Wood Hills Limited Parnership’s audited financial statements for the years ending
       December 31, 2000, 2001, and 2002;
   •   Wood Hills GP, Inc.’s and Wood Hills LP, Inc.’s Articles of Incorporation and By-laws;
       and
   •   The State of Michigan Family Independence Agency’s licensing information for the
       Project.

We also reviewed Title 12, United States Code, sections 1715 and 1735; Title 31, United States
Code, section 3801; 24 Code of Federal Regulations, parts 24 and 232; and HUD Handbooks
2000.06, REV-3; 4350.1, REV-1; 4370.2, REV-1; and 4381.5, REV-2.

The review covered the period January 1, 2002, to December 31, 2003. This period was adjusted
as necessary. We performed our review in accordance with generally accepted government
auditing standards.




  Exit                                                                             Table Of Contents
                                                9
                             INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:

   •   Effectiveness and efficiency of operations,
   •   Reliability of financial reporting, and
   •   Compliance with applicable laws and regulations.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance.



 Relevant Internal Controls


              We determined the following internal controls were relevant to our review
              objectives:

                  •   Program Operations – Policies and procedures that management has
                      implemented to reasonably ensure that a program meets its objectives.

                  •   Validity and Reliability of Data – Policies and procedures that management
                      has implemented to reasonably ensure that valid and reliable data are
                      obtained, maintained, and fairly disclosed in reports.

                  •   Compliance with Laws and Regulations – Policies and procedures that
                      management has implemented to reasonably ensure that resource use is
                      consistent with laws and regulations.

                  •   Safeguarding Resources – Policies and procedures that management has
                      implemented to reasonably ensure that resources are safeguarded against
                      waste, loss, and misuse.

              We assessed the relevant controls identified above. However, our assessment of the
              controls was limited since HUD assumed and sold Wood Hills Limited Partnership’s
              mortgage note on September 29, 2003.

              A significant weakness exists if management controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.


  Exit                                                                             Table Of Contents
                                               10
Significant Weaknesses


           Based on our review, we believe the following items are significant weaknesses:

               •   Program Operations – Wood Hills Limited Partnership did not operate the
                   Project according to its Regulatory Agreement. Wood Hills Limited
                   Partnership disposed of Project assets while in a nonsurplus cash position
                   and without approval from HUD (see finding).

               •   Validity and Reliability of Data – Wood Hills Limited Partnership’s
                   General Partner certified in the Project’s fiscal year 2001 audited financial
                   statements that the Project had $210,241 in furnishings. However, the
                   $210,241 included $11,878 for furniture that Wood Hills LP, Inc., did not
                   purchase (see finding).

               •   Safeguarding Resources – Wood Hills Limited Partnership inappropriately
                   wrote-off $518,633 of Project assets as bad debt and loaned $12,885 of
                   Project funds to Wood Hills LP, Inc., while in a nonsurplus cash position
                   and without approval from HUD. Further, Wood Hills Limited
                   Partnership inappropriately included $11,878 for furnishings in the
                   Project’s fiscal year 2001 audited financial statements (see finding).




 Exit                                                                            Table Of Contents
                                            11
                                  Appendixes
Appendix A

                   SCHEDULE OF INELIGIBLE COSTS

                              Recommendation
                                  Number            Ineligible 1/
                                    1A               $518,633
                                   Total             $518,633

1/     Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
       that the auditor believes are not allowable by law; contract; or Federal, State, or local
       policies or regulations.




     Exit                                                                        Table Of Contents
                                              12
Appendix B

         AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation    Auditee Comments




Comment 1




  Exit                                      Table Of Contents
                          13
Ref to OIG Evaluation   Auditee Comments




Comment 2
Comment 1




Comment 1




Comment 1
Comment 2




  Exit                                     Table Of Contents
                         14
Ref to OIG Evaluation   Auditee Comments




  Exit                                     Table Of Contents
                         15
Ref to OIG Evaluation   Auditee Comments




Comment 3




  Exit                                     Table Of Contents
                         16
Ref to OIG Evaluation   Auditee Comments




  Exit                                     Table Of Contents
                         17
                         OIG Evaluation of Auditee Comments


Comment 1   In a September 5, 2002, letter, HUD’s Chicago Regional Office of Departmental
            Enforcement Center requested that Wood Hills Limited Partnership’s General
            Partner have Wood Hills Limited Partnership’s owners or Wood Hills LP, Inc.,
            pay $212,075 ($197,480 in delinquent lease payments and $14,595 in operation
            advance receivables), written off as bad debt as of December 31, 2001, into the
            Project’s operating and escrow accounts. HUD’s Departmental Enforcement
            Center also requested the General Partner to submit a payment plan between
            Wood Hills Limited Partnership and Wood Hills LP, Inc., for the $245,067 in
            delinquent lease payments as of August 1, 2002. Wood Hills LP, Inc., benefited
            from the write off of the delinquent lease payments.

Comment 2   HUD’s receipt of annual financial statements does not constitute approval and/or
            knowledge of the Project’s financial position and actions. Further, HUD does not
            approve annual financial statements.

Comment 3   Wood Hills Limited Partnership did not operate the Project according to its
            Regulatory Agreement. Wood Hills Limited Partnership’s General Partner
            inappropriately certified in the Project’s fiscal year 2001 audited financial
            statements that the Project had $210,241 in furnishings. HUD’s loan approval
            process is not a guarantee the Project will succeed and following the Regulatory
            Agreement is a requirement for the Project’s owner.




 Exit                                                                          Table Of Contents
                                            18
Appendix C

                           FEDERAL REQUIREMENTS


Wood Hills Limited Partnership’s Regulatory Agreement, paragraph 6, mandated that the owner
may not, without the prior written approval of the Secretary of Housing and Urban Development
assign, transfer, dispose of, or encumber any personal property of the project, including rents, or
pay out any funds except from surplus cash, except for reasonable operating expenses and
necessary repairs, and make or receive and retain any distribution of assets or any income of any
kind of the Project except surplus cash.

Paragraph 13(g) of the Regulatory Agreement defines distribution as any withdrawal or taking of
cash or any assets of the project, excluding payment for reasonable expenses incident to the
operation and maintenance of the project.

Paragraph 9 of Wood Hills Limited Partnership’s Rider to Note, Mortgage, and Regulatory
Agreement requires all signatories to the Rider to be liable for a) funds or property of the Project
coming into their hands that they are not entitled to retain and b) their own acts and deeds or acts
and deeds of others, which they have authorized, in violation of the provisions.
HUD Handbook 4370.2, REV-1, CHG-1, “Financial Operations and Accounting Procedures for
Insured Multifamily Projects,” paragraph 2-10, section A, states that if the owner takes
distributions when the project is in default or when the project is in a nonsurplus cash position,
the owner is subject to criminal and/or civil penalties.

According to 24 Code of Federal Regulations, part 24.110, HUD is permitted to take administrative
sanctions against employees or recipients under HUD assistance agreements that violate HUD’s
requirements. The sanctions include debarment, suspension, or limited denial of participation
and are authorized by parts 24.300, 24.400, or 24.700, respectively. HUD may impose
administrative sanctions based upon the following conditions:

   •   Failure to honor contractual obligations or to proceed in accordance with contract
       specifications or HUD regulations (limited denial of participation);

   •   Deficiencies in ongoing construction projects (limited denial of participation);

   •   Violation of any law, regulation, or procedure relating to the application for financial
       assistance, insurance, or guarantee or to the performance of obligations incurred pursuant to
       a grant of financial assistance or pursuant to a conditional or final commitment to insure or
       guarantee (limited denial of participation);

   •   Violation of the terms of a public agreement or transaction so serious as to affect the
       integrity of an agency program such as a history of failure to perform or unsatisfactory
       performance of one or more public agreements or transactions (debarment);

   •   Any other cause so serious or compelling in nature that it affects the present responsibility of
       a person (debarment); or

  Exit                                                                                 Table Of Contents
                                                 19
   •   Material violation of a statutory or regulatory provision or program requirements
       applicable to a public agreement or transaction, including applications for grants,
       financial assistance, insurance, or guarantees, or to the performance of requirements
       under a grant, assistance award, or conditional or final commitment to insure or guarantee
       (debarment).

Title 12, United States Code, section 1715z-4a, “Double Damages Remedy for Unauthorized
Use of Multifamily Housing Project Assets and Income,” allows the U.S. Attorney General to
recover double the value of any project assets or income that was used in violation of the
Regulatory Agreement or any applicable regulation, plus all cost relating to the action, including
but not limited to reasonable attorney and auditing fees.

Title 12, United States Code, section 1735f-15, “Civil Money Penalties Against Multifamily
Mortgagors,” allows the Secretary of Housing and Urban Development to impose a civil money
penalty of up to $25,000 per violation against a mortgagor with five or more living units and a
HUD-insured mortgage. A penalty may be imposed for any knowing and material violation of
the Regulatory Agreement by the mortgagor, such as paying out any funds for expenses that
were not reasonable and necessary project operating expenses or making distributions to owners
while the project is in a nonsurplus cash position.

Title 31, United States Code, section 3801, “Program Fraud Civil Remedies Act of 1986,”
provides Federal agencies which are the victims of false, fictitious, and fraudulent claims and
statements with an administrative remedy to recompense such agencies for losses resulting from
such claims and statements; to permit administrative proceedings to be brought against persons
who make, present, or submit such claims and statements; and to deter the making, presenting,
and submitting of such claims and statements in the future.




  Exit                                                                             Table Of Contents
                                                20