For months, the residents at the Rolling Hills Apartment complex in Winston-Salem have been complaining about desperate conditions: mold festering under carpets, stovetop burners that catch fire, black mold and mildew fed by leaking windows, sewage backups, holes in walls and broken air-conditioning units.

Since June 1, the city of Winston-Salem has documented 645 housing code violations in 94 out of the 110 units in the apartment complex — in some cases, as many as 20 violations per unit. That means only 16 of the units have had no reported violations.

“The mold is living in the attic of many of the units,” said Gene A. Smith, who served as maintenance supervisor for the apartments from late May until Aug. 17. “It’s molded so much it’s gray hairs. The mold on the lower part is from sewage.

“There’s old wiring in the buildings,” he continued. “We had a couple units that caught fire. The wiring is not up to code. If they had a professional come in and inspect it, it would be condemned.”

The former maintenance supervisor, a man named Rick, was still working at Rolling Hills when Smith was hired. Rick, whose last name Smith never learned, had a premonition that his days at Rolling Hills were numbered.

“What position did they hire you for?” Smith recalls his predecessor asking.

“Maintenance supervisor,” Smith had replied.

“That’s my position,” Rick said.

Smith said Rick advised him to quit, but he stayed on, nurturing the hope that he could make a difference.

“When he left the bottom fell out,” Smith said. “Sewage started coming out. Raw sewage.”

Community volunteers distribute food to children at Rolling Hills. (photo by Jordan Green)
Community volunteers distribute food to children at Rolling Hills. (photo by Jordan Green)

The conditions at Rolling Hills, a private complex owned by New Jersey-based Aspen Companies where 100 percent of the units are subsidized by the federal government, drew the attention of US Rep. Alma Adams, who visited in late July and passed residents’ complaints on to the US Department of Housing & Urban Development, or HUD. Three HUD representatives, including Eileen R. Wooten, a senior account executive from the HUD field office in Greensboro, visited the apartment complex on Aug. 12, Smith said. While Wooten came with a handwritten list of 10 units that needed repairs, Smith said the primary reason for the visit was a litany of complaints by tenants about power outages, caused by a utility company turning off the power while the Aspen Companies installed security cameras to deter drug dealing, littering and fighting.

During the visit Wooten raised another issue, Smith said, inquiring as to how many of the units were vacant. The question is critical, considering that the Aspen Companies receives a monthly payment from HUD to subsidize rent — the difference between fair market value and 30 percent of adjusted household income. In Winston-Salem, fair market value for a one-bedroom apartment is $569 per month and $974 for a three-bedroom, according to the Housing Authority of Winston-Salem. Any false statement or misrepresentation to HUD regarding a housing-assistance payment contract constitutes a default by the owner, according to federal guidelines. In the event of default, HUD may reduce, suspend or terminate payments, or take steps to recover overpayments.

“I didn’t want to get caught in a lie and get in trouble with the government,” Smith recalled during an interview with Triad City Beat.

Tursha Ellis, who had been hired as the property manager less than a month earlier, was not as reticent, and Smith said she told the HUD representatives that there were only two vacant units.

Smith said he didn’t say anything to contradict Ellis at the time, but he knew immediately that the number she had cited was a significant undercount. It had to be at least 10, he thought, although he didn’t know the specifics. Ellis disappeared into the management office, according to Smith, leaving him to give the HUD representatives a tour of the complex.

“I told the lady: ‘I could get fired for this,’” Smith recalled. “She said, ‘I wouldn’t worry about it.’ I said, ‘You wouldn’t worry about it because it’s not you, but I have to worry about it.”

After the HUD representatives left, Smith said he took it upon himself to conduct a manual count of the vacant units. Not including two unoccupied demonstration apartments that are used by residents who need to take showers or get water while their own units are under repair, Smith said he counted 13 vacant units. Adding the two figures together, the total number of vacant units accounts for all but one of the remaining apartments once the 94 units in violation reported since June 1 are subtracted.

Smith said he warned Ellis: “Tursha, when they find out you’re lying, you could get in trouble.”

He estimated that during the period he worked at Rolling Hills, the company was routinely underreporting seven to 10 vacancies. The average subsidy for the Housing Choice Voucher Program in July — an equivalent program administered by the Housing Authority of Winston-Salem — was $496 per unit. Based on that figure, the Aspen Companies could potentially be pulling in $3,500 to $5,000 in illegitimate subsidies from the federal government every month.

A chart prepared for an initial public offering on the Tel Aviv Stock Machine shows that Rolling Hills is part of one of four HUD property portfolios.
A chart prepared for an initial public offering on the Tel Aviv Stock Machine shows that Rolling Hills is part of one of four HUD property portfolios.

The Aspen Companies said through a spokesperson on Monday that Smith’s claim is “categorically false.”

In spite of Smith’s apprehensions during the HUD visit, Avraham Derhy, the regional manager responsible for Rolling Hills, was apparently pleased by what Ellis conveyed to him about his interactions with Wooten and her colleagues — at least initially. Early the next week Derhy texted Smith on his cell phone: “Tursha said you did a good job with them on Friday. Thanks. Is 750-11 vacant?”

The meeting is confirmed in an Aug. 15 email from Wooten to Smith that was reviewed by TCB.

“Thanks for meeting with us on such short notice Friday,” Wooten wrote. “Per our conversation can you please provide the work orders for the units we provided?”

The email restated the list of 10 units, adding detail about the deficiencies that needed to be corrected. “Can you provide as soon as possible today?” Wooten asked. “Headquarters requested status of the units.”

Smith responded two days later: “Yes, I was fired for helping you guys out. They’re not a good company. Anyways, I expected it but it was very nice meeting you all.”

The official reason given for his termination was insubordination.

“I came in Wednesday morning, and she said today was gonna be my last day,” Smith recalled. “I said, ‘What?’ She said, ‘Every time I tell you to do something, you have a problem with it.’”

Smith said he believes the Aspen Companies is manipulating Ellis, suggesting that the company will likely let her take the fall for any improprieties that come to light.

“She’s playing the nice person and covering up at the same time,” Smith said. “She’s in a position where she doesn’t have a lot of money. They’re basically using her, and they’ll probably fire her once she’s served their purpose.”

Ellis declined to comment for this story.

Smith said Ellis came to North Carolina from New Jersey to take the job of property manager at Rolling Hills. Based on what she told him, Smith said Ellis had expected the company to put her up at a hotel while she got established in Winston-Salem, but once she arrived Derhy told her that wasn’t their responsibility.

“She didn’t have no money; she didn’t have no car,” Smith said. “Her mother lives in Charlotte, and she drove her up here. She had to stay with the lady at the community center who comes to feed. Now, she’s staying with her brother. She still gets a ride to work from the community volunteer.”

The Aspen Companies suggested in an Aug. 9 statement to TCB that Ellis’ hiring was part of a proactive response to Rolling Hills’ troubles.

In addition to clearing dozens of housing-code violations, a spokesperson for the company said, “We have taken significant measures to immediately improve the onsite management of Rolling Hills. We have hired a new property manager (as of mid-July), who has been working closely with both residents and with the city, and has met Councilman [Derwin] Montgomery and his community liaison to ensure their satisfaction with the work that is being done.”

On Aug. 24, a week after he was fired, Smith sent a series of texts to Derhy, the Aspen Companies’ regional manager.

“OK, now I got your things back to you,” he wrote at 8:26 p.m. “I will send you and Tursha [Ellis] my last three days of time worked. I guess I’ll have to forget about gas and petty cash payment.”

Then, alluding to the fraud he is alleging to TCB, Smith added for good measure: “And thanks for the uplift, bro. Good thing there’s more to life than you and your scams, Mr. Avraham.”

At 9:22 p.m., he followed up with another text, using capital letters to emphasize the intensity of his feelings: “DO THE RIGHT THING and we’re good.”

Three hours later, Smith was still vexed over the way his employment with the Aspen Companies had come to an end, and his mind turned to an unresolved tension with one of the maintenance workers, a man named Antonio, over an uncollected debt. At 12:35 a.m., Smith sent his third and final text to Derhy: “Antonio owes me money. If he threatens my family again or where I live it’s not going to go well. Just giving you a heads up.”

At 9:22 the next morning, Derhy replied, declining to respond to Smith’s slight against his personal integrity or to defend the company’s reputation. He merely wrote: “I will speak to Tursha to make sure she puts in for mileage you are owed. I will definitely speak to Antonio as well.”

The Aspen Companies said Smith’s claims, including that he “was terminated without cause, and for reasons other than insubordination,” are “categorically false,” but did not elaborate.