Settlement: Landlord, management companies collected side payments from Section 8 tenants

A Minneapolis landlord and associated management companies will pay $130,000 to the U.S. government for allegedly collecting side payments from Section 8 voucher tenants, according to a settlement agreement announced Wednesday.

Federal prosecutors say Richard Edlich, Cities Home Rentals, MDC 2000 Investments Inc. and Rifive Investments LLC collected $60,000 in side payments from 16 tenants between 2008 and 2014.

Meria Murray is the lead plaintiff in the False Claims Act lawsuit that federal authorities filed on her behalf. She said the landlords tricked her into paying rent above the amount allowed under the Housing Choice Vouchers Program by having her sign separate lease agreements.

Murray moved into her northeast Minneapolis home in 2008. The landlords submitted alternate leases with the approved $1,012 monthly rent amount to Minneapolis Public Housing Authority, but billed Murray for the higher amount, forcing her to pay a $238 monthly difference until August 2011.

The U.S. Department of Housing and Urban Development prohibits landlords from charging Section 8 tenants additional side payments and requires an addendum to any private lease agreements to make sure they abide by Section 8 policies. The Housing Choice Vouchers program helps low-income families afford housing in the private market.

The settlement resolves the allegations brought by Murray in April 2013, who said she paid more than $5,000 in side payments. The landlords agreed to pay $130,000 to the federal government. Murray will receive $18,000 as her share, according to the settlement agreement. A statement from the Minnesota U.S. Attorney's office said there was "no determination of liability" in the agreement. Edlich could not be reached for comment.

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