Feds' oversight lax in Tubman Terrace theft case

They were basic documents, but there is no record of them.

The U.S. Department of Housing and Urban Development has been unable to find a record of a key tax document for the company of the man at the heart of alleged theft of hundreds of thousands of dollars in the the Harriet Tubman Terrace Apartments case. At question has been HUD's level of oversight while providing millions of dollars in taxpayer money. The search was part of a Poughkeepsie Journal investigation using Freedom of Information Law requests.

Carl Immich, 53, was property manager at Tubman Terrace. Three months after  he was accused of embezzling federal tax dollars that were to go to subsidizing rents at the apartment complex in the City of Poughkeepsie, records of HUD-certification for Immich and his company, New York Property Management & Development LLC, are non-existent. The only certification on file is for Northeast Development & Management Company LLC, a defunct entity, according to documents obtained by the Poughkeepsie Journal through a Freedom of Information Act request. Northeast Development disbanded around 2008.

READ MORE: Tubman Terrace property manager accused of embezzling funds

This the latest example of issues involving HUD's oversight of the Tubman Terrace site, which received millions in rent subsidies.

The Poughkeepsie Journal previously reported that documents and correspondence from 2009 to 2014, obtained by Freedom of Information Law requests, showed a recurring history of unauthorized expenditures and improperly documented payments. Six independent audits of the federally subsidized housing complex bore warning signs of financial improprieties. But the Tubman Terrace board and HUD claim proper oversight was exercised to ensure the financial well-being of the complex.

The “previous participation certification” is one of the most important documents required, which reviews the applicant to ensure they’ll be able to financially and legally carry out the duties required. HUD experts say new certifications would need to be submitted if the managing agent for a property were to change. But for Immich’s business formed in late-2007, it doesn’t exist.

Terry Bruner previously worked as an attorney for HUD offices in Texas for 10 years before opening his own law firm in Houston four years ago. Bruner said if there are any changes at the property — whether in ownership or the managing agent — it would trigger HUD to require a new certification.

“Typically, why that is so important is that HUD checks it, cross-references it with its own internal databases to make sure there has been no malfeasance,” he said. “HUD does this fairly regularly to make sure they’re getting qualified individuals or entities.”

Immich allegedly stole hundreds of thousands of dollars by charging on the Tubman credit card and writing checks on the Tubman bank account for personal benefit. He recently pleaded not guilty on charges of embezzling government property and theft of property from programs receiving government funds, which each carry a maximum sentence of 10 years in prison.

READ MORE: Immich pleads not guilty to federal embezzlement charges

Immich declined to comment, and his attorney, George Edward Fufidio, Jr., did not return calls.

The certificate HUD does have on file is from 2003, when Northeast Development oversaw the multifamily housing complex. Roland Traudt, chairman and CEO managing agent of Northeast when it was in operation, said it was during that time the company renovated Tubman Terrace. Traudt also dealt with HUD during his time managing the complex. HUD spokesman Charles McNally did not respond to a Poughkeepsie Journal reporter attempting to confirm this.

“Northeast Management was responsible for the turn around. The place was in struggle,” Traudt said. “Physically, the buildings were falling apart, so we got over $8 million to fix up all 200 apartments inside and out, plus restructuring the existing debt.”

However, Traudt said he severed ties with Immich around 2008 and the business dissolved. While Immich is listed as property manager on the HUD certification document, Traudt said Immich was never a “legal officer” of Northeast Development.

Tubman Terrace board attorney David Wise confirmed Northeast Development was hired as the property manager with Immich “on site under the Northeast property umbrella.” When Northeast disbanded, Immich formed his own company — New York Property Management & Development, Wise said, and the Tubman Terrace board contracted with him.

Wise said the board notified HUD of the new property manager, and the federal department didn’t have issues.

McNally said it’s the responsibility of the owner and property manager to ensure proper documentation is on file, adding that the federal department never received any documents listing Immich’s company. Yet, several audits as well as an Affirmative Fair Housing Marketing Plan for Tubman Terrace — a document obtained through a previous Freedom of Information Act request — listed the new managing agent's name.

“If there was a change in the legal entity managing the property, the ownership is responsible for submitting that change to HUD,” McNally said. “We rely on the good faith submissions of the managers and owners of these housing (complexes) to do things like certify their previous participation and things like that. We do not have an ongoing checking of tax ID numbers.”

The two business had separate tax ID numbers, making them distinctly different legal entities, but since HUD was working with the same individual, McNally said it had no reason to believe it was dealing with a different entity.

“In most instances where a legal entity changes, the personnel changes. A new previous participation certification needs to be filed, and in this case, that wasn’t the case. It was the same person, the same property manager…that’s why I think this played out as it did,” McNally said. “HUD simply does not have the resources to monitor every time a legal entity with the same exact staff changes in a multifamily housing development.”

Amanda Fries: afries@poughkeepsiejournal.com, 845-437-4824; Twitter: @mandy_fries