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Steering Allegations Resurface Within Housing Program

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By JOHN W. ALLMAN

jallman@tampatrib.com

Published: January 18, 2009

Updated: 01/20/2009 12:46 pm

TAMPA - It was a well-known complaint within Hillsborough County's Affordable Housing program.

Sylvia Alvarez was accused of a serious conflict of interest - steering clients from a homebuyer education class taught by her nonprofit agency, the Housing and Education Alliance, to American Liberty Funding, a mortgage company that she and her fiance had taken turns operating since 2001.

The allegations suggested Alvarez was trying to take advantage of the program in order to profit twice off poor residents seeking their first homes. Alvarez denied any wrongdoing.

The complaints were echoed by at least two affordable housing employees and presented to then-housing director Dexter Barge and County Administrator Pat Bean.

"We definitely saw it as serious," said former affordable housing officer Howie Carroll.

The county did little to investigate, however.

Nearly three years later, the allegations are drawing notice again - this time from county commissioners wrestling with a request to give $50,000 in federal funds to Alvarez's nonprofit agency.

Despite the concerns, Bean and assistant county administrator Mike Merrill are recommending that the commission approve the money at its meeting Wednesday.

"Even though there were folks who had complained, we could never get them to talk to us," Bean said in a recent interview.

Agency Eligible For Funds

In July, Alvarez's agency was certified by the county as a federal Community Housing Development Organization.

Federal guidelines stipulate that the agency is eligible for HOME funds to use to develop affordable housing or to pay operating costs. Alvarez would use the money for salaries, administrative expenses and training.

Only two other agencies in Hillsborough have received the federal designation. County officials say they are limited in the number of local nonprofit organizations they can partner with.

The $50,000 allocation was first discussed Jan. 7. Four county commissioners questioned the request, and one, Mark Sharpe, expressed concern about the allegations of steering.

Alvarez defended herself, both in writing and during a brief statement to the commission. She said that since 2007, American Liberty had worked with about 25 low-income homebuyers out of more than 300 who received down-payment assistance from the county.

"A majority of those were actually referred from our mortgage company to HEA's classes," she told the commissioners. "If HEA was stealing or steering clients, then I guess common sense tells you that we did a pretty bad job of it."

In 2007, Alvarez gave a different total to county investigators, saying that American Liberty had worked with no more than 19 homebuyers since her agency began teaching education classes. Alvarez prompted a county investigation by alleging misconduct by three affordable housing employees.

The Tampa Tribune, however, has found at least 60 loans handled by American Liberty since 2002 - all for people who attended a class taught by Alvarez's agency.

Merrill, the assistant county administrator, tried to ease commissioner concerns by saying the allocation was an acceptable risk because the money would be given to Alvarez only as a reimbursement for documented expenses.

The commission unanimously voted to postpone its decision for two weeks.

"There's a lot of allegations. Nothing's been substantiated. We're not going to pull the due-process rug out from underneath somebody because of unsubstantiated allegations," Merrill said after the meeting.

"Let's say we did turn some folks over in the county to investigate. That doesn't happen overnight. A year from now, we could still be standing here not having another agency help us."

No Comment

In June 2007, Janett Guzman, a single mother of three from Peru, said she bought the last house available in Amber Place, a low-income neighborhood in East Tampa.

The community of 26 houses, which sits off Orient Road near the Seminole Hard Rock Hotel and Casino, was developed by the Housing and Education Alliance and built with county money and state housing grants. Alvarez's agency, as developer, was allowed to make a profit off each sale.

It's a project similar to what her nonprofit agency could do as a federal designee.

Guzman, 34, attended a homebuyer education class required by the county for low-income, first-time homebuyers who want state or federal down-payment assistance.

Her class was taught by Misael Alamo of the Housing and Education Alliance. Guzman said she approached him privately for help finding a house.

"He said, 'OK, Janett, but don't tell anybody,'" Guzman told the Tribune. "He said, 'You go to the Housing and Education Alliance.' He say, 'Let me show you who is the best salesman.' He shows me Luis."

Luis Torres was mortgage operations manager for American Liberty.

Torres, she said, worked with her for nearly a year and took care of everything, including assigning himself as her broker. Typically, buyers are allowed to pick their own broker.

"All I did was sign" the paperwork, Guzman said. She said she was unaware of how the process should have worked.

American Liberty made $2,143 in fees off her loan. Alvarez's agency made $38,490 from the sale.

Alvarez did not respond to a request for comment. Alamo no longer works for her agency, according to a woman who answered the phone at HEA's office.

Torres hung up on a reporter when contacted.

"I really don't want to talk to you," he said, before ending the call.

Fees Add Up

County officials have no idea how many people have worked jointly with American Liberty and the Housing and Education Alliance.

When the complaints from real estate agents and brokers began in early 2006, officials made a few phone calls - they can't say how many - to try to verify the allegations.

"We couldn't get any confirmation that they were steered or not," Carroll said.

That was the extent of the review.

They did not research how many loans had been handled by American Liberty. They didn't check to see how many of the loans were for people who had attended a class taught by Alvarez's agency.

The Tribune, through a public records request, found 87 loans handled by American Liberty between 2002 and 2007. The county was able to provide files for 66 homebuyers; the other files can't be found, according to former interim housing director Bill Armstrong.

Of those 66 loans, 60 were to people who were taught by Alvarez's agency.

Complaints Ignored

Documents and interviews show that county officials have largely dismissed the allegations.

Bean, in interviews, has blamed housing employees for not doing their jobs.

"The people who were supposed to be overseeing the program and making sure the outcome for the client was the best possible outcome, they weren't looking," Bean said.

But affordable housing employees did complain - and were ignored.

In 2006, Maggie Tagliarini and Mike Rowicki met with their boss, Barge, who was director of affordable housing at the time. They discussed allegations of steering and a possible conflict of interest with Alvarez owning both a nonprofit organization and a mortgage company that worked with low-income homebuyers. Tagliarini's husband is a cousin of Alvarez's fiance, Philip Tagliarini.

"There was a lot going on between Sylvia and American Liberty," Barge said. "They were complaining about Sylvia, but I couldn't decipher how accurate that information was. I just didn't know how much I could trust the advice of my staff at that time."

Barge said he passed along the concerns to Bean.

Around that time, Bean was contacted by then-County Commissioner Kathy Castor, who requested that Bean meet with Alvarez. Castor, now in Congress, wanted Bean to help Alvarez with concerns she had about the affordable housing office.

"She felt she wasn't being treated fairly, that the alliance wasn't being treated fairly," Castor said previously. "The right thing to do was go to the county administrator."

Alvarez went back to county officials in 2007. This time she alleged that Maggie Tagliarini, Rowicki and a third housing employee, Frank Turano, were acting improperly. Alvarez said the three were trying to undermine her nonprofit agency by creating their own company to compete for low-income loans.

Alvarez's allegations prompted an internal county investigation and, in 2008, a federal investigation, which is ongoing.

Questions

The three housing employees have not commented publicly since Alvarez made her allegations.

Maggie Tagliarini has since resigned, and Turano has retired. Rowicki is still employed, but has been on paid administrative leave since last year.

County documents, however, do include a written response by Maggie Tagliarini from 2007.

"Alvarez started these allegations because I brought up the conflict of interest issue when she purchased her boyfriend's mortgage company while having a county contract for education," Tagliarini wrote. "When she was told that it could be a possible conflict, she began her crusade to discredit the staff of the housing department, which apparently she has done.

"No one has questioned the housing staff, and her contract is still in place. There have been complaints of client steering by her agency and the county has failed to address this situation either."

Maggie Tagliarini and Rowicki declined to comment for this story.

In early December, an internal audit of affordable housing detailed problems in the office from 2004 to 2006. The audit did not mention Alvarez or the allegations. But it did say Bean knew little about any serious problems in the office.

Bean, in a recent interview, said that isn't true.

"I did know there were questions about Sylvia. It put me in a very difficult position when Commissioner Castor is asking me to help Sylvia, then staff is coming in saying there's problems with Sylvia," Bean said. "Nobody asked me that from the auditor ... about Sylvia or anything like that."

IN PERSPECTIVE

The Housing and Education Alliance's relationship with Hillsborough County has been contentious.

Sylvia Alvarez's agency taught homebuyer education classes for the county from 2002 to early 2007.

In 2004, Alvarez entered into a county contract to build a new affordable-housing neighborhood, Amber Place. Last year, residents became embroiled in a fight with Alvarez's agency over control of the homeowners association and resident dues. The residents have since dissolved the homeowners association and fired a property management firm hired by Alvarez to run the neighborhood.

In 2005, Alvarez's nonprofit agency bought a mortgage company, American Liberty Funding, which she and her fiance, Philip Tagliarini, had taken turns operating since 2001.

That same year, Alvarez signed a county contract to exclusively teach education classes for two years. She abruptly canceled that contract in early 2007 after the county asked to include a conflict-of-interest clause that would have blocked the alliance and American Liberty Funding from mutually benefiting from affordable housing clients.

In spring 2007, Alvarez prompted an internal investigation of the affordable housing office, alleging improper conduct by three employees. That investigation sparked a federal inquiry that is ongoing.

Last year, the Housing and Education Alliance filed a lawsuit against the county, alleging a breach of contract for nonpayment of water hookup fees at Amber Place. The lawsuit is ongoing.

And, in August, American Liberty Funding said it would no longer work with the county's Affordable Housing program after housing officials banned mortgage brokers from receiving a controversial fee, called a yield-spread premium. American Liberty had for years received the fee. County officials say the fee, which raises the interest rate on loans, can force buyers to pay more for their homes than expected.

John W. Allman

Reporter John W. Allman can be reached at (813) 259-7915. For past stories on Sylvia Alvarez and the Housing and Education Alliance, go to Keyword: Education Alliance.

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