BY BEN L. KAUFMAN
The Cincinnati Enquirer
Major players in Cincinnati's failed Niemes home ownership program were sentenced Monday by U.S. District Judge Sandra S. Beckwith. David M. Fingerman, 46, of Greendale Avenue in Clifton, admitted failing to tell the U.S. Department of Housing and Urban Development (HUD) that he used his own title company at closings.
Judge Beckwith fined him $5,000 and put him on two years' probation. As part of the plea agreement, Mr. Fingerman agreed to give up his law license.
"That is a big hit for someone to do that," Prosecutor John DiPuccio said.
Judge Beckwith also fined Mr. Fingerman's firm, Niemes Community Development Inc., $5,000 because Mr. Fingerman admitted it misapplied federal money in a revolving mortgage fund.
Mr. DiPuccio said he expected that $5,000 to come from Mr. Fingerman because the development company appears to have few, if any, assets. "There is no allegation that anybody was cheated in the deal," Mr. DiPuccio said when Mr. Fingerman and his development firm pleaded guilty. "No one is saying that anyone would have provided it any cheaper. It was a crime of non-disclosure."
Niemes Community Development bought and rehabilitated homes with HUD money and repaid those loans when it sold the houses to people with modest incomes, Mr. DiPuccio said. Mr. Fingerman was primary owner and operator of Niemes.
It didn't take long for the Niemes rehab-resale program to go sour in the early 1990s. By 1995, city council was willing to give 65 disgruntled owners of poorly rehabbed homes full deeds to their properties and money to fix the houses.
In a "wind down" agreement with Niemes, Cincinnati agreed to use $480,000 in federal grant money for repairs and clear titles. An Enquirer investigation found Niemes' serious financial troubles led to shoddy rehab work on several houses.
Under the program, qualified middle- to lower-income people could become half-owners of homes rehabilitated by Niemes. Over time, they would pay Niemes to get full control of the houses. When Niemes ran into financial trouble, the people found creditors threatening to foreclose.
It is not clear how much Cincinnati lost in the program. Estimates approach $2 million.
Roy Niemes and his firm, Niemes & Son Plumbing, were not involved in the failed Niemes home ownership - home rehab program.
