Yetiv

Background

The Park on Westview property (“the property”) is a 212- unit multi-family housing project in Houston, Texas. Yetiv purchased the property in 1997 with a HUD-insured loan. To secure HUD insurance, Yetiv was required to sign a regula- tory agreement which imposed various duties related to the management and financial operations of the property, includ- ing the duty to submit annual financial statements. As a multi- family mortgagor, Yetiv was additionally subject to the Civil Money Penalty statute, 12 U.S.C. § 1735f-15, which autho- rizes HUD to impose civil penalties against mortgagors who “knowingly and materially” commit certain enumerated viola- tions. § 1735f-15(b)(1). One of the violations for which civil YETIV v. HUD 12799 penalties may be imposed is the failure to provide HUD with annual audited financial statements. See § 1735f- 15(c)(1)(B)(x).

After Yetiv failed to file financial statements for the five fiscal years spanning 1997-2001, HUD issued an administra- tive complaint in July 2002 seeking civil penalties pursuant to the Civil Monetary Penalty statute. Five months later, prior to an adjudication on the merits, Yetiv prepaid…