The Department of Housing and Urban Development suspended the Virgin Islands Housing Finance Authority from receiving federal funds on Monday, citing years of financial mismanagement, fraudulent contracting, and the criminal conviction of a former agency executive.
HUD Secretary Scott Turner announced the suspension effective immediately after the agency sent a 13-page letter to VIHFA official Dayna Clendinen detailing the findings. The agency is now barred from future federal procurement pending an active investigation.
“The Trump administration is changing the game when it comes to who we entrust with taxpayer dollars. Organizations riddled with corruption, mismanagement, and crime will no longer be allowed to squander billions,” Turner told Fox News Digital.
The suspension centers on approximately $2 billion in federal disaster recovery funds allocated to VIHFA following Hurricanes Irma and Maria in 2017. That figure amounts to roughly $20,000 per resident of the U.S. Virgin Islands. Nine years later, HUD says residents still lack adequate housing and a reliable power grid.
“Nine years later, because of VIHFA’s blatant mismanagement of these critical disaster funds, USVI citizens still do not have the housing and electrical power they were promised nearly a decade ago,” the agency’s letter stated, noting the continued presence of blue tarps on roofs across the islands.
Darin Richardson, VIHFA’s former chief operating officer, was sentenced in March to 36 months in federal prison following a conviction on charges of bank fraud, money laundering, making false statements, and criminal conflict of interest. Prosecutors said Richardson received $107,000 in kickbacks from a contractor during his tenure. A contract involved in the scheme was later inflated by 50%, from $3 million to $4.5 million, and much of the purchased lumber was left to rot in the tropical heat, according to HUD.
HUD said Richardson’s conviction alone was sufficient grounds to question VIHFA’s fitness to receive additional federal funds.
The agency also cited audit findings showing that administrative spending consumed a disproportionate share of available disaster recovery funds while actual rebuilding work lagged far behind schedule.
Turner said he has “substantial evidence” of VIHFA’s failure to comply with aid obligations, a lack of internal financial controls, unresolved fraud risks, and repeated false certifications to HUD affirming compliance with federal requirements.
“[VIHFA] officials cannot be allowed to prioritize kickbacks over helping families recover from disasters. I promised that HUD would be a faithful steward of the American people’s hard-earned money, and we are keeping that promise,” Turner said.
