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In an October 25 letter, San Diego's city auditor confirmed allegations that non-profit Alliance For African Assistance, working with the Economic Development Division, knowingly submitted a false claim for more than $20,000 in Community Development Block Grants. The investigation began after an anonymous tip was left on the city's fraud hotline.

"The complaint alleged that the organization submitted the request for work to be done knowing that the work had already been completed. We concluded that the allegation was SUBSTANTIATED (emphasis theirs)," read the October 25 letter addressed to Beth Murray, director of the city's Economic Development Division.

According to the block grant contract, projects must be approved before work begins in order to qualify for reimbursement.

To make matters worse, the investigation found that the non-profit submitted false bids in order to fulfill the three-bid-requirement on the application. And, to make matters even worse, the audit found a potential conflict of interest between an executive from the non-profit and the contractor who was awarded the bid.

"This matter will be referred to law enforcement for potential criminal prosecution for fraud and falsification of [block grant] reimbursement documents," read the letter.

"We recommend the Economic Development Division issue a demand letter for return of the [block grant] funds that were paid to the non-profit organization for work that appears to have been completed before the reimbursement agreement was authorized."

Beth Murray director of the city's Economic Development Division failed to respond to requests for more information in time for publication.


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SurfPuppy619 Oct. 26, 2011 @ 5:05 p.m.

Fraud in a government run program where they spend other peoples money with impunity, I am shocked, SHOCKED I TELL YOU!


BlueSouthPark Oct. 27, 2011 @ 11:58 a.m.

Wow, you would have thought with all of the post-HUD investigation new rules/regs about CDBG allocations that the city wouldn't let anything like this slip by. Guess the oversight isn't really there, as advertised.


BlueSouthPark Oct. 27, 2011 @ 12:06 p.m.

Here's a list of all fiscal year 2011 applicants and recipients, just to get an idea of how CDBG money is allocated in San Diego:


The three categories are CED (Community/Economic Development Projects) PS (Public Services Projects) CIP (Capital Improvement Projects)


nostalgic Oct. 27, 2011 @ 12:41 p.m.

Looks like CDBG applicants get it all or get zero. The Urban Corps got $185,651. Wonder what it was for? Interesting web site. $100,000 is almost the bare minimum anyone asks for, although there were a few in the $75K range. A lot were more than $200,000. A little here, a little there, pretty soon it adds up.


BlueSouthPark Oct. 27, 2011 @ 1:52 p.m.

Post-HUD, San Diego's new CDBG rules made $50,000 the new minimum grant.

That may have been in response to the practice of bestowing smaller grants, around the time when Ben Hueso left his Economic Development job and was elected to office, by councilmembers to nonprofit business associations in their districts.

Some of those "little" $20K-$40K CDBGs were used by the business associations to pay PR people to promote business-association-controlled MAD formation, for example. That's over, thank goodness!


Dorian Hargrove Oct. 27, 2011 @ 12:20 p.m.

Update: City Auditor Eduardo Luna said that the fraudulent claim was submitted by the Alliance for African Assistance.


nostalgic Oct. 27, 2011 @ 8:34 p.m.

I don't see the difference between these guys and every other city non-profit contractor. Must be a a CDBG thing.


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