Perhaps the first indication that HUD’s issues with real estate speculation and fraud went far beyond local hustlers and “suede-shoe” swindlers came with federal charges against the powerful Dun & Bradstreet credit agency in New York City. In 1972, the agency was charged with twenty-four counts of bribery, fraud, and conspiracy. According to a UPI report, Dun & Bradstreet played a critical role in an expansive plot to sell “depressed-area homes by real estate speculators to low-income blacks and Puerto Ricans,” with the hope that they would default on their loans quickly. After a few months, when a homeowner fell into foreclosure, it was not uncommon for the same house to be quickly resold under the same dubious terms to another unsuspecting family. In total, forty individuals — including seven FHA employees and a public official — and ten corporations were indicted for bribery and fraud involving foreclosures of 2,500 homes, which cost the FHA insurance fund $200 million.

The Dun & Bradstreet scheme worked in a fashion similar to housing fraud scams in other cities: in order to secure a large loan for purchase of a property with an inflated price, a speculator convinced a prospective homeowner to sign a blank credit report, which was then taken to a mortgage bank. A mortgage banker in on the conspiracy would take the blank report to the people at Dun & Bradstreet, who would give the homeowner a favorable credit report that allowed for an even larger loan. The mortgage company would then pay off an FHA employee to inflate the value of a property for sale and confirm its good condition. If a house were to be found in obvious disrepair, a crooked contractor would sign false papers claiming repairs had been made. The intricacy of the fraud resulted in a five-hundred-count indictment against multiple parties across the New York housing industry. As a result, HUD suspended the eighty-seven offices of Dun & Bradstreet from doing any further business with the agency for an undisclosed period of time. The federal prosecutor Anthony Accetta understood the long-term effects of this fraud: “I don’t see how anyone who is Black or Puerto Rican could have faith in the white system after being shaken down like this and then losing his house two months later.”