9 Investigates Hardest Hit Fund money going to some with criminal pasts



The federal Hardest Hit Fund is doling out $1 billion dollars in aid to struggling homeowners across Florida, but its rules do not block people with criminal pasts from cashing in. 9 Investigates found dozens of such cases.

Orange County homeowner Jeremiah Gholston has a court file dating back to 1995.  We discovered it includes an arrest affidavit in a felony case just last year for stealing sales tax from his used car dealership. 

But still, state tax dollars paid up to $42,000 to help him stop the bank from foreclosing on his home.

"It makes me think there's been an administrative disaster," said State Senator Darren Soto, a Democrat from Orlando.

Soto has watched the Hardest Hit Fund closely. It is $1 billion in federal aid that is handed out by state administrators to help pay mortgages for struggling homeowners.

Besides Gholston, 9 Investigates found another man who got aid for his Dr. Phillips townhouse -- despite failing an initial test, and a court record including three previous foreclosures, an eviction and ten debt disputes. Statewide, some recipients were convicted for fraud and possession of child pornography.

9 Investigates investigation reveals there's simply no telling how much it has happened.

"If we had more folks reviewing these applications, this could go out and do some good in the community," said Soto.

The Florida Housing Finance Corporation said its federal rules allow even convicts to get funds. Officials there said an applicant must simply show that his name is on the mortgage and verify that he meets income thresholds, in order to receive basic approval.

The only disqualifying criminal histories are mortgage-related felonies; an active bankruptcy would also disqualify an applicant. Hardest Hit administrators in Florida said the program was not intended to make moral judgments on applicants' past and adding further criminal screenings was never part of their plan, even though some other states did it.

Through a plea deal of no contest, Gholston avoided conviction on the tax issue but paid $8,000 as restitution. He disputes ever owing the sales tax and says he pleaded no contest simply to avoid a costly trial. 

 Meanwhile, thousands of Floridians are still waiting for a piece of the hundreds of millions of dollars not yet doled out.

A federal inspector general is now auditing the program.