(The Center Square) – The federal government has demanded Thurston County repay up to $667,990 in fraudulent rental assistance payments doled out during the COVID-19 pandemic.
That figure comes from 36 cases of suspected fraud the county identified in 2022, per four Notice of Recoupment documents from the U.S. Department of the Treasury Office of Inspector General, or OIG.
According to an Aug. 14 memo from the U.S. Department of the Treasury, in the summer of 2023, Treasury received a report from the Thurston County Auditor’s Office of eight cases of suspected or confirmed fraudulent rental assistance payments, and subsequently, more came out.
“These events and the proper response from Thurston County show the value of our internal auditing program,” Thurston County Auditor Mary Hall said in a news release emailed to The Center Square.
“What the internal auditor initially identified in the rental assistance program ended up being a much broader issue,” she continued. “Ensuring public funds go towards their intended purpose to benefit those in need is the core mission of the County Auditor’s Office.”
Thurston County contracted with the nonprofit Community Action Council of Lewis, Mason and Thurston counties to facilitate the payments for applicants during the pandemic.
During stay-at-home orders, applicants were encouraged to apply for help with rent, utilities, and other household operating costs impacted by job loss.
Thurston County suspended its contract with CAC after the Auditor’s Office disclosed initial findings in 2022, indicating CAC had not properly vetted applications. According to the Olympian, this action led to a high-profile quarrel between the county and the nonprofit, with CAC initially denying any fraud had occurred.
The OIG documents detail the various ways some applicants scammed the system.
In some cases, the tenant on the application did not live at the property and the landlord identified on the application was not even known to the property manager. In one case alone, payments totaling $36,000 were paid out for an individual claim.
In other cases, the property address on the application was invalid. The Auditor’s Office address search found that the property did not exist, yet fraudulent payouts of tens of thousands of dollars were made.
In another scenario, applications for rental assistance were made for properties owned by someone else – that is, a private residence with no tenants.
According to Treasury’s OIG report, Thurston County has already repaid some of the fraudulent payouts but has also requested leniency from the federal government “given the extraordinary circumstances the county faced in administering the program.”
OIG’s response did not indicate the agency is inclined to let Thurston County off the hook: “We acknowledge that Thurston County encountered challenges in implementing its ERA (Emergency Rental Assistance) program and its request for leniency in the recovery of those funds based on those challenges … however, Thurston County is required to return these ineligible payments to the Federal Government.”
The Center Square reached out to CAC but did not receive a response.
Thurston County Sheriff Derek Sanders did respond to a request asking if his office is investigating any of the individuals in the auditor’s findings or the nonprofit.
“TCSO didn’t have even remotely close to the detective resources needed to investigate the fraud,” Sanders said via email. “The detectives I did assign to look into the issue noted that the victim, Community Action Council, resided in the city limits of Lacey. The case was referred to them and from there, the county deliberated the jurisdictional issues back and forth.”
