City Housing Authority contractor pleads guilty

October 15, 1994|By This article was written and reported by Sun staff writers Marcia Myers, Scott Higham and Melody Simmons. Sun staff writers Tanya Jones and Eric Siegel contributed to this article.

A contractor involved with the Baltimore Housing Authority's $25 million no-bid repair program pleaded guilty yesterday to making illegal payments to an agency official that included $500 for a vacation and rehabilitation work on the house of his estranged wife. The conviction is the third in a continuing federal probe into fraud in the Housing Authority.

Two weeks ago, prosecutors charged the contractor, Sedrick F. Chavis, 46, of Fallston with paying $2,000 in cash and home improvements to Charles Morris, a Housing Authority official who administered the agency's no-bid Vacancy Special Funding Program.

Morris pleaded guilty in August to accepting bribes from contractors who were given work, and he is cooperating in the investigation.

Chavis was not asked for his cooperation, according to his lawyer.

As president and owner of Sedrick F. Chavis Construction Inc., Chavis received $3.5 million in no-bid work from the Housing Authority, the third most among companies involved in the program.

The contractor is a relative of senior Housing Authority analyst Anita Chavis, but his lawyer and federal investigators differ on how close the relationship is.

Mr. Chavis' lawyer, Stephen Schenning, said yesterday that the two are distant relatives, that she is married to his second cousin. The lawyer said Ms. Chavis was not involved in the scheme.

"The fact is, Sedrick has been involved in the home construction business for 22 years," Mr. Schenning said. "They know each other, but it's not a close, abiding relationship."

Federal investigators say Ms. Chavis is Mr. Chavis' sister-in-law.

Chavis Contractors began as a general contracting business in 1977, remodeling old homes and building new ones.

In 1992, the company posted $3 million in sales and reported its net worth at $861,673, according to a financial profile prepared by Dun & Bradstreet.

Program began in 1993

The federally financed funded Vacancy Special Funding Program began in March 1993 with the goal of reducing the agency's waiting list of 18,000 families by renovating housing throughout Baltimore.

Prosecutors say that on more than one occasion, Chavis gave Morris cash totaling $1,000. The first payment, $500 in March 1993, was to help pay legal costs for Morris, who had hired a lawyer after being asked by a superior to prepare a "soup to nuts" report about the no-bid program, including its beginnings, operations and budget. The attorney helped Morris organize and present the information, prosecutors said.

Another $500 was paid in July 1993 so that Morris could take a vacation.

Chavis also did about $1,000 worth of home improvements at the home of Dianne Morris, Morris' estranged wife.

First Assistant U.S. Attorney Gary P. Jordan said Ms. Morris paid her husband for the improvements, but when Chavis did not charge for the work, Mr. Morris pocketed the money.

Because Ms. Morris is a secretary with the U.S. attorney's office in Baltimore, lawyers from the Justice Department are handling that Morris part of the case. Ms. Morris was not at work yesterday, and no one answered the door at her townhouse on Queens Lace Street in Randallstown last night.

The first sign of trouble for Chavis came earlier this year when auditors for the U.S. Department of Housing and Urban Development began inspecting homes and apartments repaired by 10 of the 32 no-bid contractors hired by the Housing Authority.

The auditors found that Chavis' company had inflated its costs by as much as 88 percent. The auditors also said that the company had billed taxpayers at least $143,060 for overpriced work and materials, and for work that was never performed or completed, federal reports and Housing Authority records indicate.

Chavis will not be charged for the overbilling, Mr. Jordan said, because those problems have been rectified. "We don't view that as an area appropriate for criminal charges," he said.

Some examples of overpriced work and work that wasn't done, according to the records:

* At 2201 E. Jefferson St., near Johns Hopkins Hospital in East Baltimore, the company charged $9,595 for work it never performed, including the replacement of a broken-up sidewalk outside the home. On Jan. 21, 1993, more than a year before auditors inspected the home, the Chavis company signed a certificate swearing that all of the work had been completed.

* At 1018 N. Arlington Ave., in Upton near the Lafayette Market, the company covered basement windows with wood rather than install dual-glaze windows required by the contract. The company also inflated costs for drywall it replaced by as much as 150 percent. Auditors said the no-bid contractors generally tripled the industry cost to replace drywall.

* At 2502 and 2514 S. Paca St. in South Baltimore, the company inflated its painting costs by as much as 209 percent. Auditors found that the no-bid contractors charged twice the industry rate to paint homes, often falsifying how many walls, ceilings and doors they they actually painted.

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