Former D.C. Housing Authority Employee Pleads Guilty to $15 Million Mortgage Fraud Scheme

Richard Cunningham, 55, a real estate developer who was formerly a D.C. Housing Authority employee, pled guilty in District of Columbia U.S. District Court in connection with a scheme to defraud private mortgage lenders of more than $15 million.

According to court documents, for almost four years, beginning in August 2020 and continuing through May 2024, Cunningham submitted false documents and fraudulent documents to mortgage lenders , our in support of loan applications for various multifamily properties he owned in the District of Columbia.

In the first phase of the scheme, Cunningham applied for six secondary renovation loans from a Virginia-based private mortgage company, which required him to have sufficient equity in his properties as collateral. Knowing his equity was insufficient to qualify, Cunningham submitted falsified mortgage statements for the primary loans on those properties, significantly understating the balances owed to make his equity appear greater than it was. Relying on those falsified documents, the lender funded all six loans, totaling about $7.4 million.

In the second phase, Cunningham sought renovation financing from an Oregon-based private mortgage company for two additional District properties. To make those properties appear to generate reliable income, Cunningham fabricated lease documents purporting to be from a “Veterans Assistance Payments” program run by the U.S. Department of Housing and Urban Development. There is no such program. In reality, Cunningham had taken genuine Housing Assistance Program lease documents from HUD’s Housing Choice Voucher program and altered them, changing “HAP” to “VAP” throughout, then filled them in with forged entries and signatures to make it appear veterans were already living at the properties under a federal voucher program. He also submitted fabricated rent rolls falsely showing all tenants held vouchers from the Department of Veterans Affairs. The lender funded one of the two loans, in the amount of $4.7 million. The other application was rejected.

In total, Cunningham sought about $14.9 million from the two lenders and received about $12.1 million based on his false statements.

Cunningham faces a maximum statutory penalty of 30 years in prison and a $1 million fine. Sentencing was scheduled for Dec. 4, 2026.

The announcement was made by U.S. Attorney Jeanine Ferris Pirro.

The investigation was conducted by the FBI Washington Field Office and the Department of Housing and Urban Development, Office of Inspector General (HUD-OIG).

The matter was prosecuted by HUD-OIG Special Assistant U.S. Attorney Samantha R. Miller for the U.S. Attorney’s Office for the District of Columbia.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division. The core mission of the Fraud Division is to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars. The Department of Justice efforts to combat fraud support President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

Post-closing audits. Pre-funding reviews. Mortgage QC. Mortgage Quality Control.