Two more individuals related to the Chelsea Housing Authority scandal from 2011 had been convicted on conspiracy to defraud the government in connection with the rigging of federal inspections of the Authority's apartments.
James H. Fitzpatrick, the former director of programs and modernization, and Bernard J. Morosco, a consultant who assisted the Authority with the HUD inspection process, were convicted in a fraud which proved that Morosco was able to obtain lists of units which were to be inspected well ahead of the inspections. This allowed the Chelsea Housing Authority’s staff to upgrade those apartments and assure top marks for the Authority in its inspections. The highly rated inspection reports allowed the Chelsea Housing Authority to have reduced oversight from HUD.
Once this scam was revealed, the HUD inspection ratings for the Authority plummeted, reflecting the deferred maintenance and failure to address the capital needs of the projects which were endemic during the period in which the convicted former executive director, Michael J. McLaughlin, supervised the Authority. McLaughlin had been convicted earlier in connection with other elements of fraudulent behavior.
Nixon Peabody is continuing to represent the Chelsea Housing Authority in connection with civil actions against McLaughlin, former board members and accounting professionals for their failure to adequately supervise and discover the fraud.