HUD 3.0: Hundreds of Thousands of Dollars Owed To Contractors

We are working up a very, very heavy story on precisely how much money has been stolen from Contractors under HUD 3.0.  The genesis of this was PPMS South’s welching on debts owed.  In the course of our investigation into the matter we began to unearth a veritable graveyard of hundreds of thousands of dollars not paid to Contractors.  Most recently was a conversation I just had with Bruce Davenport.  Davenport was hired by Scott Allen Raines, owner of Raines Property Service.  Here’s where the common theme of Order Mills and National’s refusing to run background checks comes through:

Bradley County Sheriff’s Office Charges Businessman With Theft
posted September 30, 2009sar

Scott Allen Raines
The Bradley County Sheriff’s Office has completed an investigation into a local businessman’s sales of surplus mobile homes that were once used by the Federal Emergency Management Agency as temporary housing for victims of Hurricane Katrina.

Scott Allen Raines, 42, of Kile Lake Road, was indicted during the August session of the Bradley County Grand Jury on one count of theft over $10,000.

Investigation conducted by the BCSO Criminal Investigations Division revealed Raines, through his company Raines Mobile Home Transport, purchased surplus trailers and then advertised them for sale through Internet sites. The charges stem from the sale of two units for a total of $23,000 that he failed to deliver to a buyer as scheduled in mid July.

Raines turned himself in at the Judicial Center on Tuesday. He was released after posting a bond of $10,000.

Now, Raines as late as 10 February, 2012, was rearrested for Violation of Probation by the Bradley County Sheriff’s Office in Tennessee.  Any two bit, dime store Google background check would have found this out.  Did the Nationals we are getting ready to discuss look into Raines’ seedy history?  I would hope the answer is yes; however, I am beginning to find a common theme here.  On the one hand, all Nationals are going to state that they take investigations seriously; they try to keep the public safe, etc.  On the other hand and I have NO evidence YET to prove this many of the Order Mills being hired to distribute the National’s Word Orders seem to have an extremely HIGH margin for criminal histories and failure to pay Contractors.  Kickbacks?  I just do not know … YET!

Davenport and three other Contractors I am aware of, all working HUD 3.0 Contracts in Georgia and Tennessee, were taken for monies in the tens of thousands of dollars.  Davenport stated that he reached out to Cityside whom made good on the money Raines refused to pay.  CooperCitiWest and DMC Mortgage both scoffed at Davenport’s multiple requests for payments.  Specifically, Edmund Bulger, Cooper City West, enacted a Great Wall of Silence and categorically refused to discuss anything with Davenport.

I personally reached out to Bulger for comment as this is a pretty serious allegation; an allegation of refusing to pay for services rendered upon federal properties.  Why is this so serious?  Well, for starters, Davenport and others are legally entitled to attach the Performance Bonds posted for the HUD 3.0 Contract.  Second, when a Corporation has full and overt legal knowledge of criminal acts ongoing they are obligated to report it.  See, that’s the rub here:  Davenport pleaded with CooperCitiWest to shut Raines down.  Not only did they refuse to, they cranked up the Orders to Raines!

We are going to reach out to Craig Karnes, Atlanta HUD, and the National Association of Mortgage Field Services later this week.  Karnes is responsible for the Administration of the HUD 3.0 (and now the HUD 3.6).  Conceivably, HUD and the United States Government should have a vested interest in the pattern which is beginning to evolve under color of State and Federal law; Contracts appear to be used in a manner calculated to defraud small businesses coast-to-coast.  NAMFS is an organization to which these and previous Corporations whom have had track records of failure to pay Contractors.  While I am not myself a member of NAMFS, one would think that such an auspicious Organization would have a Code of Conduct which would preclude membership by those whom are furthering the aforementioned.

These listings and all further reported Failure to Pay listings will begin to be maintained on our ISTAR Database.  We should have these up by Sunday.



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