Word from Justice

Federal Housing Administration and Justice Department officials were plainly worried about the congressional uproar over the housing scandals (TIME, April 26, July 12). Some Senators complained publicly that the Administration had done little to check fraud in the program. Last week Justice set the record straight. In the past 20 months it has obtained 74 criminal indictments against 136 promoters suspected of building and repair frauds --and won 67 convictions.

Then, to show that it really meant business, Justice announced that it was carefully investigating top Government housing officials suspected of extending favors to private builders (e.g., ex-FHA Assistant Commissioner Clyde L. Powell, who ducked behind the Fifth Amendment when Senators quizzed him). Justice indicated that there soon would be more indictments.

None of the indictments to date concerned the well-publicized windfall profits siphoned off from FHA-backed apartment mortgages. Most of them related to the Title I home-improvement program, which offered wide opportunities to veteran con men. The sharpers obtained loan money by inflating estimates of construction costs, supplying fictitious credit ratings, forging signatures on notes, faking project-completion certificates, etc. Some of the loans were diverted to making auto and alimony payments, and even to paying gambling debts.

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