A devastating internal audit by the Department of Housing and Urban Development has exposed systemic fraud and mismanagement under the Biden administration, revealing that approximately $5.8 billion in rental assistance payments went to deceased individuals, potential non-citizens, and other questionable recipients during fiscal year 2024.
The findings, detailed in HUD's Agency Financial Report for fiscal year 2025, identified approximately 30,000 deceased tenants who either remained actively enrolled in rental assistance programs or continued receiving taxpayer funds after their deaths. The fraud occurred across all 50 states, with particularly large concentrations in New York, California, and Washington, D.C.—predictably, the most heavily Democratic jurisdictions where government accountability has historically been weakest.
HUD's internal investigation compared federal death records from the U.S. Treasury database against the department's own assistance rolls, uncovering systematic failures in verification procedures that allowed payments to flow to ineligible recipients for extended periods. The audit also identified thousands of payments to individuals whose citizenship status could not be verified, raising serious questions about whether taxpayer funds intended for American citizens were diverted to illegal aliens.
The total fiscal year 2024 rental assistance budget reached approximately $50 billion distributed to non-federal entities. Of that sum, HUD classified $5.8 billion as "questionable payments"—representing more than 11% of the entire program budget flowing to recipients who should never have qualified for assistance or who failed basic eligibility verification.
This massive fraud didn't occur by accident. The Biden administration's ideological commitment to expanding government dependency created an environment where oversight was deliberately minimized in favor of maximizing payment volume. HUD's report explicitly faults the prior administration for directives "to push funding out the door with minimal oversight," prioritizing speed and political objectives over fiscal responsibility and program integrity.
Secretary Scott Turner, appointed by President Trump to restore accountability to HUD, issued a withering assessment of the Biden administration's management. "A massive abuse of taxpayer dollars not only occurred under President Biden's watch, but was effectively incentivized by his administration's failure to implement strong financial controls resulting in billions worth of potential improper payments," Turner stated.
The secretary emphasized that HUD under Trump's leadership will investigate the full scope of fraud, hold bad actors accountable through appropriate enforcement action including potential criminal referrals, and implement strengthened controls to prevent future abuse. This represents a fundamental shift from the Biden approach, which subordinated taxpayer protection to progressive political priorities of expanding welfare rolls regardless of eligibility.
The Biden HUD's failure extended beyond simple negligence into institutional incompetence. The department allegedly lacked even basic tools to verify whether local entities receiving federal funds were enforcing eligibility rules. This created a massive principal-agent problem where billions flowed from Washington to state and local administrators with virtually no accountability mechanisms ensuring funds reached legitimate recipients.
Rental assistance programs under Biden "placed substantial trust and responsibility" in non-federal entities without implementing verification systems that would detect obvious fraud like payments to deceased individuals. This approach mirrors the broader Biden administration pattern of using federal agencies to advance progressive political goals while deliberately dismantling guardrails that would prevent waste and abuse.
The concentration of fraudulent payments in New York, California, and Washington D.C. reflects both the scale of rental assistance programs in high-cost blue states and the weak oversight that characterizes governance in jurisdictions controlled by Democrats for decades. These states and cities have demonstrated repeatedly that they prioritize expanding government programs over ensuring those programs function efficiently or honestly.
The payment of rental assistance to potential non-citizens represents a particularly egregious violation of both law and public trust. Federal rental assistance programs are explicitly reserved for U.S. citizens and qualified immigrants with legal status. Any diversion of these funds to illegal aliens constitutes both fraud and a betrayal of American taxpayers whose resources are being redirected to individuals with no legal right to be in the country.
The Biden administration's open borders policies created perfect conditions for this type of fraud. With millions of illegal aliens flowing into American communities, combined with sanctuary policies that prevent information sharing between immigration enforcement and benefit administrators, verifying citizenship status became virtually impossible in many jurisdictions. The Biden HUD apparently made no serious effort to address this vulnerability.
Former HUD Secretary Marcia Fudge presided over this debacle. Her tenure was characterized by the same combination of ideological rigidity and administrative incompetence that defined most Biden cabinet positions. Rather than implementing controls to prevent fraud, the Biden HUD focused on maximizing payment volume to achieve political objectives regardless of whether recipients were legally entitled to assistance.
The scope of deceased recipient fraud alone demonstrates astonishing negligence. Death records are among the most reliable and accessible government databases. Social Security Administration death files are routinely used to prevent fraud in other federal programs. The fact that 30,000 deceased individuals continued receiving rental assistance reveals that basic data matching procedures were either not implemented or not enforced.
Some of these deceased recipients likely continued receiving payments for months or years after death, with funds flowing to surviving family members, landlords, or fraudsters who concealed deaths to continue collecting benefits. Each individual case represents theft from taxpayers, but the systemic pattern indicates institutional failure at the highest levels of HUD management.
The fiscal implications extend far beyond the immediate $5.8 billion in questionable payments. Fraud creates perverse incentives that corrupt entire program structures. When recipients learn that eligibility verification is minimal and fraud rarely prosecuted, participation in schemes increases. When administrators realize oversight is weak and consequences unlikely, they reduce their own verification efforts. This creates a downward spiral where fraud becomes normalized and expected.
Moreover, massive fraud undermines public support for legitimate assistance programs. When taxpayers see billions flowing to deceased individuals and potential illegal aliens, they reasonably question whether any of these programs are managed honestly. This erodes political support for genuine safety net programs that serve truly needy American citizens.
The Trump administration's response indicates a return to basic principles of fiscal accountability. HUD is implementing processes to identify fraud, revoke or pause funding to entities demonstrating poor controls, and refer criminal cases to the Justice Department where evidence supports prosecution. These straightforward reforms should have been standard practice but were abandoned under Biden's management.
However, accountability requires more than administrative reform. Congress must investigate how the Biden administration deliberately weakened controls, who made decisions to prioritize speed over accuracy, and whether political appointees or career staff bear responsibility for systematic failures. Criminal referrals should follow where evidence supports charges.
The rental assistance fraud also highlights broader problems with the administrative state. When federal agencies distribute $50 billion annually through complex networks of state and local entities, opportunities for fraud multiply exponentially. Every intermediary represents a potential point of failure where funds can be diverted to ineligible recipients through negligence, incompetence, or outright theft.
Constitutional Rights PAC supports comprehensive reform of federal housing assistance programs to restore accountability, verify citizenship status of all recipients, implement real-time data matching against death records and other eligibility databases, establish meaningful penalties for entities that fail to enforce verification requirements, and empower whistleblowers to report fraud without retaliation. These reforms would protect taxpayers while ensuring assistance reaches legitimately eligible Americans.
The Biden HUD disaster exemplifies what happens when progressive ideology overwhelms basic management competence. Committed to expanding government dependency and hostile to oversight that might reduce participation, the Biden administration created conditions where fraud flourished. Reversing this damage requires both immediate accountability and structural reforms that prevent future administrations from repeating these failures.
