FIRST ON FOX: Trump admin freezes out Minnesota of the Caribbean over alleged hurricane-aid abuses

HUD secretary Scott Turner describes the ongoing federal investigations into alleged fraud in Minnesota on ‘Fox News Live.’

FIRST ON FOX: The Trump administration suspended a U.S. territory's housing-finance authority from receiving further federal funding after the Department of Housing and Urban Development cited years of alleged financial mismanagement, dire audit findings and the conviction of a former executive in a disaster-recovery contracting scheme.

The suspension over alleged waste and abuse at the Virgin Islands Housing Finance Authority (VIHFA) comes as HUD Secretary Scott Turner, a member of the White House Task Force to Eliminate Fraud, ramps up the administration's scrutiny of federal grant recipients following a series of high-profile investigations nationwide.

"The Trump administration is changing the game when it comes to who we entrust with taxpayer dollars. Organizations riddled with corruption, mismanagement and crime will no longer be allowed to squander billions," Turner, a former NFL cornerback, told Fox News Digital.

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"[VIHFA] officials cannot be allowed to prioritize kickbacks over helping families recover from disasters. I promised that HUD would be a faithful steward of the American people’s hard-earned money, and we are keeping that promise."

Turner said the suspension is "effective immediately," as the HUD chief's deputy Andrew Hughes fired off a 13-page letter to VIHFA official Dayna Clendinen laying out HUD’s findings and alerting that they are barred from future federal procurement while an investigation takes place.

When approached for comment, a representative who picked up the phone at VIHFA on Monday directed Fox News Digital to a full voicemail box. Fox News Digital then reached out via VIHFA's contact page for comment.

Fox News Digital also reached out to Del. Stacey Plaskett, D-V.I., and Democratic Virgin Islands Gov. Albert Bryan's office for additional comment.

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A destroyed home is seen from a Marine Corps MV-22 Osprey surveying damage from Hurricane Maria in St. Croix,, U.S. Virgin Islands, Sept. 21, 2017. (Reuters/Jonathan Drake)

In the letter, HUD claimed the nearly-$2 billion appropriation to VIHFA was intended for recovery after Hurricanes Irma and Maria devastated the American archipelago in 2017 – calculated to about $20,000 per USVI resident.

"Nine years later, because of VIHFA’s blatant mismanagement of these critical disaster funds, USVI citizens still do not have the housing and electrical power they were promised nearly a decade ago," the agency said, citing the prevalence of blue-tarped roofs and shoddy infrastructure, including a teetering power grid in the time since.

HUD said audits found disaster recovery spending lagged badly while administrative spending consumed a disproportionate share of available funds. The agency also cited the former COO's criminal kickback scheme as evidence of weak internal controls.

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This image shows Trunk Beach on the island of St. John in the U.S. Virgin Islands. (Jeffrey Greenberg/Getty Images)

VIHFA’s former chief operating officer, Darin Richardson, was sentenced in March to 36 months in prison after being convicted of bank fraud, money laundering, making false statements and criminal conflict of interest. Prosecutors said Richardson received $107,000 from a contractor in connection with the scheme. HUD said the misconduct occurred "during execution of his duties" at VIHFA.

That contract was later inflated by 50% from $3 million to $4.5 million, HUD said in its letter, adding that much of the lumber then was allowed to rot in the tropical sun.

HUD said Richardson's conduct, standing alone, was sufficient to call into question VIHFA's responsibility to receive additional federal funds.

HUD informed VIHFA it has "substantial evidence" of failure-to-comply with aid obligations, a lack of internal controls over financial matters, fraud risks and conflict-of-interest situations.