The Lower Manhattan Development Corporation today urged anyone who improperly received Residential Grant Program funds to come forward and avoid prosecution before LMDC’s Amnesty Program ends on September 30, 2003.  Since the Amnesty Program was launched on August 25, calls to the fraud prevention hotline have increased, and $4,500 in funds has already been recouped, with arrangements being made to recoup additional funds.
 
The Residential Grant Program was launched in August 2002, to provide assistance to residents and families who lived downtown on September 11, 2001 and continue to reside in Lower Manhattan, as well as offer financial incentives to new residents who make a two-year commitment to live downtown.  The $281 million Residential Grant Program is part of a $2 billion grant from the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant Program.   
 
LMDC Chairman, John C. Whitehead said, “When someone moves outside of the zones, they are no longer eligible to receive grants funds. If an individual did not notify LMDC as required when they moved, this amnesty initiative gives individuals an opportunity to report their new address to the LMDC without the threat of prosecution.”
 
LMDC President Kevin M. Rampe said, “With HUD’s support, the Residential Grant Program has stabilized the residential base in Lower Manhattan and helped the area recover from the devastating effects of September 11^th.   In continuing to ensure that only fully eligible individuals receive these grants, I again encourage anyone who is inappropriately receiving funds to take this opportunity to come forward before the September 30 deadline and avoid federal prosecution.”
 
HUD Regional Director for New York and New Jersey Marisel Morales said, “The LMDC's Amnesty program is a welcome innovation and we are delighted to support it.  Ensuring full and complete restitution of misused federal funds is of paramount importance to HUD and we believe that this program will accomplish just that."
 
The LMDC compliance team, led by Vice President of Investigations Dyana Lee, has investigated and prevented numerous applications from proceeding and those efforts have resulted in several arrests by federal authorities.   Charges that have been brought in those cases include mail fraud and theft of government funds— and may result in prison sentences of up to ten years.
 
The Amnesty Program will allow individuals who are inappropriately receiving funds to avoid prosecution, such as those who have moved out of the specified grant zones prior to the end of their two year lease and are still receiving the grants.  Recipients wishing to take advantage of this program must take the following steps and meet the following conditions: 

• The individual must call the fraud hotline at 1-866-830-9131 and request amnesty.
• The individual must report all information fully and with complete candor and provide continuous and complete cooperation.
• The individual must make full and complete restitution of all funds improperly received. 
• At the time the individual comes forward LMDC has not received information relating to the conduct from another source.

 Individuals can call the fraud hotline at 1-866-830-9131 for any questions, to check if they are qualified for the amnesty program, or to arrange to return the money.  The last day to call is September 30, 2003.
  
The Residential Grant Program establishes three zones of eligibility and offers three types of grants to owners and renters living south of Delancey and Kenmare Streets: the September 11, 2001 Residents Grant, the Family Grant, and the Two-Year Commitment-Based Grant.  Funds are distributed based on proximity to Ground Zero and on the condition that residential buildings meet certain health, safety and habitability codes.   As of August 2003, over $200 million in grants had been approved and more than 40,000 applications received for the program.  The deadline to apply for the program was May 31, 2003. 
 
Immediately following the September 11, 2001 attacks, residential vacancy rates in some areas of Lower Manhattan climbed to an all time high of over 40%. The LMDC Residential Grant Program (RGP) contributed significantly to the stabilization of the neighborhood by attracting new residents to the area, encouraging existing residents to stay, and providing an incentive for two-year leases.   More than half of approved applicants in Zone 1 have identified themselves as new residents.  Over two-thirds of the applicants for the LMDC Residential Grant Program were self-reported in low and moderate income households. This includes those living in rent-controlled and rent-stabilized apartments, conversion lofts, Mitchell-Lama housing, apartments with Section 8 vouchers, and public housing.    Occupancy rates in Lower Manhattan are now over 95% and Battery Park City has higher occupancy rates than at any other time in its history.