LYNN — The Lynn Housing Authority & Neighborhood Development’s (LHAND) Rental Assistance for Families in Transition (RAFT) account was defrauded of $8,000 through fraudulent online banking transactions from out-of-state individuals, along with one facsimile check, officials said at a zoom meeting Tuesday night.
RAFT is a state-led program started in 2005 to assist families facing eviction or utility loss with up to $10,000 a year. Rosario Fresco, who runs LHAND’s fiscal department, said she noticed funds were missing from the account because she checks it daily.
“Our RAFT and ERAP problem is very big. We have some people that were basically taking money out of the account. We found it pretty quick, I look at the account every day, we probably have over 1000 checks going through that program at any time. It’s a lot of activity,” Fresco said.
Fresco said that the fraudsters used the RAFT program’s account and routing numbers to pay their bills online. She said that in another incident, an individual used the program’s account and routing numbers to print a fake check that he or she cashed at a convenience store.
“When you send the check at the bottom of the check, you got your routing number and you got your account number, so people were paying their bills using the account number and the routing number that is on the check,” Fresco said. “We also had an incident where somebody pretty much created a check the same way, and they cashed the check at one of those 7-11 things.”
Fresco and her colleagues were able to report the five cases of fraud to Eastern Bank in a timely manner, and she said that the $8,000 was refunded within 24 hours. She said the fraud cases are currently under investigation by the Department of Housing and Community Development (DHCD).
Sara Johnson is LHAND’s Family Success Center head in the organization’s Curwin Circle location. She said the financial impacts of the pandemic led to more households using the RAFT program, fewer face-to-face interactions with applicants, and; consequently, more fraudulent transactions slipping through.
“There was a significant increase in RAFT that existed prior to the pandemic, but it got expanded after the pandemic hit, and then the ERAP program came out, but that was the federally-funded Emergency Rental Assistance Program. It was a massive increase in the funding that we normally see year-to-year. Since we were closed to the public, we did a lot online, and everything was done via email and things like that, which allowed people to just send us documents, rather than coming into the office and meeting with them face to face. We did start seeing a little bit more attempts at some fraudulent activity on that end,” Johnson said.
LHAND is continuing to guard against fraud by implementing additional screening, Johnson said.
“We’re just continuing to add more protections during our application screening process to avoid fraud. I think it’s kind of two different things, seeing it kind of in the application submission piece, and then attacking the bank account piece,” she said.
LHAND Executive Director Charles J. Gaeta said that given the program’s size, he was pleased that the fraud was minimal.
“We’re fortunate that in a program that size, there’s been such minor activity. We’ve been really fortunate, but they do a terrific job every day,” Gaeta said.
Anthony Cammalleri can be reached at [email protected].