The Trump administration has immediately suspended all future federal funding to the Virgin Islands Housing Finance Authority (VIHFA) due to allegations of years of severe financial mismanagement, dire audit findings, and a former executive’s conviction in a disaster-recovery contracting fraud scheme. HUD Secretary Scott Turner declared that organizations plagued by corruption and mismanagement will no longer be permitted to waste taxpayer dollars, emphasizing that kickbacks will not be prioritized over disaster recovery efforts. This drastic measure follows a HUD investigation that revealed VIHFA’s alleged failure to effectively utilize nearly $2 billion in funds allocated for recovery after Hurricanes Irma and Maria in 2017, with residents still lacking promised housing and power nearly a decade later. Audits uncovered disproportionately high administrative spending, the conviction of former COO Darin Richardson for accepting over $107,000 in kickbacks from a contractor, and a systemic lack of internal controls and fraud prevention, despite repeated false certifications to HUD. HUD cited a ‘glacial’ pace of recovery, with minimal completion rates for housing projects and a significant gap between administrative expenditures and resident-focused aid, stating that the consequences of VIHFA’s actions are unacceptable for disaster-devastated residents.
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