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Following the Twisting Trail of Fraud Series: THE MANIPULATORS; UNRAVELING THEIR HOUSING SCHEMES Series Number: 3/3
[FINAL Edition]
The Washington Post (pre-1997 Fulltext) - Washington, D.C.
Author: Downey, Kirstin
Date: Sep 4, 1990
Start Page: a.01
Section: A SECTION

On her own, she enlisted the help of another HUD employee, Hilton L. Green, then a low-level official in the office of HUD's inspector general. "[Sarah Lyon] came to me and said, `They won't listen to me. Will you?' " said Green, a decorated Vietnam veteran who fought with the 82nd Airborne Division. Together, they cracked the case.

[James C. Nistler]'s soon-to-arrive right-hand man at HUD, and one of the people charged with helping manage the single-family FHA program, was lawyer Peter Novick, who since has been sentenced on similar charges of defrauding HUD. Novick engaged in the fraudulent activity while a lawyer in private practice in the early 1980s, during a several-year stint between jobs at HUD. Last year, Novick pleaded guilty to making false statements to HUD and was sentenced to one year in a halfway house.

Now, under a different administration, HUD officials say they are moving to find ways to curtail fraud. In particular, in 1988, the HUD inspector general recommended that tougher appraisal standards be imposed, which has happened as a result of the savings and loan scandal. HUD also has increased the size of the staff monitoring loans.

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