DETROIT - The Detroit Land Bank Authority (“DLBA”), a public organization working on behalf of the City of Detroit and the Detroit Building Authority in the City’s redevelopment and demolition management efforts, has agreed to pay the United States $1,503,000 to resolve allegations relating to unsubstantiated backfill dirt costs invoiced by demolition contractors and paid by the DLBA from December 2016 through June 2022, in connection with the DLBA’s blight elimination program. The United States contends that the claims for payment violated the False Claims Act, 31 U.S.C. §§ 3729-3733.
Congress created the Troubled Asset Relief Program (“TARP”) in response to the financial crisis of 2008 to restore liquidity and stability to the financial systems of the United States. In 2010, the United States established the Hardest Hit Fund (“HHF”) using TARP funds to provide targeted aid in states hit hard by the economic and housing market downturn. Beginning in 2013, the City of Detroit received approximately $258 million from the HHF to help demolish blighted properties within the City of Detroit and assist neighborhoods with high vacancy rates and blighted residential properties. The DLBA allocated a portion of its HHF award for neighborhood improvement projects, which included acquiring properties, demolishing blighted properties, and providing ongoing property maintenance for neighborhood improvement projects.
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