Chicago Sues Ex-Employee Alleging $200K Rental Assistance Fraud

Chicago Mayor Brandon Johnson is suing a former city employee and four other people accused of using a fake property management company to scam the city out of more than $200,000 in Covid-19 emergency rental assistance funds.

The city’s Emergency Rental Assistance Program used $170 million in federal grants to help over 30,000 low-income tenants and landlords cover rent and utilities during economic strife caused by the pandemic in 2020 and 2021.

But Johnson claims that Ilyas Lakada — a local landlord and licensed attorney formerly with the city’s Department of Aviation and Department of Procurement Services — submitted fraudulent applications to the city requesting more than $705,000 in rental assistance starting in 2021, according to the lawsuit.

Lakada and his co-defendants allegedly used forged documents and fake rent amounts and time periods, ultimately receiving over $200,000 in aid from the city.

“Those essential housing resources were meant to provide relief in a time of crisis, not to be misused at the expense of those in need,” Johnson said in a news release.

Lakada is accused of working with co-defendants Akhen Wilson, Aashish Patel and Mohammed Anwar Hussain, who formed a property management company called HAM Management a month after ERAP was announced, the news release stated. HAM Management was involuntarily dissolved in June of 2021.

Another co-defendant, Sarmad Mahmood, allegedly let Lakada use his ex-wife’s “personal identifying information” to submit a fraudulent application. The city’s lawsuit also accuses Lakada of “pretending to be tenants in buildings that he owned” to get assistance money.

Johnson and Corporation Counsel Mary B. Richardson-Lowry asked a Cook County Circuit Court judge to order the defendants to pay back the funds along with “penalties, the city’s legal fees, and triple damages,” in a suit filed Thursday.

“This kind of abuse erodes the trust and resources vulnerable communities in need look to the City to provide,” Richardson-Lowry said in the release. “We are seeking stiff penalties … to hold these actors accountable and to make clear that taking advantage of the City’s vital resources will not be tolerated.” 

ERAP assisted eligible Chicagoans with up to 18 months of missed rent and utility payments, and up to three months of future rent and utilities, according to the lawsuit.

Lakada allegedly submitted more than two dozen fraudulent applications to the city for properties managed by HAM Management and resigned before the city became aware of the alleged fraud. The city claims its investigation found that the management company was not actually affiliated with any of the properties included in Lakada’s applications.

As a city employee, Lakada made just under $109,000 in 2020 — a higher salary than 84 percent of employees in his department, according to the Illinois public salaries database compiled by the Illinois Answers Project.