6140 N. Kimball Ave.
In a sweeping lawsuit filed on September 11, 2024, the City of Chicago is seeking to hold a group of property owners and managers accountable for allegedly defrauding the city’s Emergency Rental Assistance Program (ERAP). The lawsuit, filed in the Cook County Circuit Court, accuses the defendants of submitting fraudulent claims to obtain over $200,000 in rental assistance funds that were intended to support low-income residents struggling to pay rent during the COVID-19 pandemic.
The complaint, brought by the City of Chicago’s Corporation Counsel, names Ilyas Lakada, HAM Management, LLC, and its operators—Mohammed Anwar Hussain, Akhen Wilson, and Aashish Patel—as key defendants. Additionally, the lawsuit accuses Sarmad Mahmood of assisting in the fraud by providing personal information for false applications. Together, these individuals and entities allegedly orchestrated a scheme to exploit federal funds earmarked for pandemic relief.
Background: The Emergency Rental Assistance Program
In response to the financial hardships brought on by the COVID-19 pandemic, the U.S. Treasury established the Emergency Rental Assistance Program (ERA). The City of Chicago received $182 million in federal funds through the program and launched its own Emergency Rental Assistance Program (ERAP) in May 2021. ERAP provided rental assistance grants directly to landlords on behalf of qualifying tenants who met specific criteria, including income loss due to the pandemic. Tenants could receive up to 18 months of past and future rent, and both landlords and tenants were required to submit documentation to verify their eligibility.
The Alleged Scheme: False Applications, Fake Tenants, and Fraudulent Funds
According to the lawsuit, the defendants saw an opportunity to exploit the rental assistance program for personal financial gain. At the center of the alleged scheme is Ilyas Lakada, an Illinois-licensed attorney who owned several rental properties in Chicago. The lawsuit claims that Lakada, acting as both landlord and tenant in many instances, submitted fraudulent ERAP applications by fabricating tenants, exaggerating rent owed, and using forged documents to secure funds.
In one example, the City alleges that Lakada claimed $36,000 in unpaid rent for a property at 6140 N. Kimball Avenue by pretending to be both the landlord and tenant. Investigators found that Lakada had not even acquired the deed to the property until September 2021, months after he claimed the unpaid rent began. Additionally, the lawsuit accuses Lakada of using the personal identifying information of his acquaintance’s ex-wife to submit fraudulent applications in her name.
Similarly, HAM Management, LLC, which was formed by Mohammed Anwar Hussain, Akhen Wilson, and Aashish Patel just one month after the City announced its ERAP program, is accused of submitting 16 fraudulent applications. The company allegedly posed as both landlords and tenants in properties they did not manage, using fake email addresses and temporary email accounts to submit applications. The lawsuit claims HAM Management collected $81,000 in rental assistance from the City through this fraudulent activity.
Both Lakada and HAM Management allegedly used fake rental ledgers and forged utility bills to back up their fraudulent claims. In one case, HAM Management applied for $45,000 in rental assistance for an apartment at 1429 W. Ardmore Ave ue, submitting fake property management agreements and a forged tenant ID. The landlord of the property, however, told investigators that he had never heard of HAM Management, and utility records confirmed that the tenant identified in HAM Management’s application had never lived there.
Widespread Fraud: Connections Between the Defendants
The lawsuit suggests that the schemes perpetrated by Lakada and HAM Management were not isolated incidents but rather interconnected frauds. Both Lakada and HAM Management used the same office building as their mailing address for ERAP payments, and their applications featured strikingly similar forged documents, including identical rental ledgers. Additionally, the lawsuit points to financial transactions between Lakada and Mohammed Anwar Hussain, suggesting further collaboration between the two parties.
City investigators also found that the fraud extended beyond Chicago’s rental assistance program. Lakada and his associates submitted dozens of fraudulent applications to the Illinois Housing Development Authority (IHDA), securing hundreds of thousands of dollars in additional rental assistance funds. Bank records show that Lakada and HAM Management received at least $350,000 in IHDA payments through these fraudulent applications.
Attempts to Obstruct the Investigation
In addition to submitting fraudulent claims, the defendants are accused of attempting to obstruct the City’s investigation. According to the complaint, when the City served an investigative subpoena on Hussain, he falsely claimed that HAM Management was a restaurant and that he did not know his co-defendants, Akhen Wilson and Aashish Patel, even though all three were listed as managers or agents of the LLC. Hussain also claimed that he had no records or bank statements related to HAM Management, a claim that was contradicted by documents the City later obtained during its investigation.
Lakada, meanwhile, provided evasive responses to the City’s inquiries, claiming that he no longer had access to emails or documents related to his rental properties because his phone had been stolen, his laptop was disposed of, and he had lost access to his email account. Despite these claims, the City uncovered emails and forged documents that linked Lakada directly to the fraudulent activity. Notably, Lakada used his City of Chicago work email to send himself forged utility bills that were later submitted as part of his ERAP applications.
Legal Action and Potential Penalties
The lawsuit, filed under Chicago’s False Claims Ordinance, seeks substantial financial penalties against the defendants. Under the ordinance, individuals or entities that knowingly submit false claims to the City can be fined up to $10,000 per claim and may be required to pay three times the amount of damages caused. In this case, the City is seeking damages for the more than $200,000 already paid out, as well as penalties for the additional fraudulent claims that were submitted but not approved.
“The defendants in this case exploited a program designed to help the most vulnerable Chicagoans during one of the most challenging periods in our city’s history,” said Mary B. Richardson-Lowry, Corporation Counsel for the City of Chicago. “We are committed to holding them accountable for their actions and ensuring that relief funds go to those who truly need them.”
In addition to financial penalties, the City is also seeking reimbursement for the costs of the investigation and legal proceedings. A jury trial has been demanded, and the case is expected to move forward in the coming months.
Implications for the City’s Pandemic Relief Efforts
The lawsuit comes at a time when cities across the United States are grappling with how to effectively distribute pandemic relief funds while preventing fraud. Chicago, like many other major cities, relied on federal assistance programs to help residents and businesses weather the financial impacts of the COVID-19 crisis. However, the scale of the relief effort also created opportunities for bad actors to exploit the system.
While the City of Chicago has taken steps to strengthen oversight and prevent future fraud, officials warn that the misuse of emergency funds during the pandemic could have long-term consequences for the availability of future assistance programs. “Every dollar that is stolen through fraud is a dollar that cannot be used to support families in need,” Richardson-Lowry said. “We will continue to pursue those who abuse the system, and we will work tirelessly to recover misappropriated funds.”
As this lawsuit moves forward, it will likely serve as a warning to others who may have sought to take advantage of pandemic relief programs. Chicago’s legal action underscores the importance of accountability in the administration of public funds, particularly during times of crisis.