Sexual extortion and intimidation: DOJ goes after unscrupulous landlords

An Ohio woman finds her locks changed after she refuses her landlord’s demands for sex. A Colorado family finds the new landlord gropes the children. Paying rent for a Georgia woman becomes a chance for the landlord to forcibly kiss her.

Such instances of sexual harassment are among many transgressions the Department of Justice cited in recent cases against landlords as part of its Sexual Harassment in Housing Initiative, a program that prosecutors tout as a groundbreaking program that's nabbed $17 million in funds in dozens of cases; the money is then paid to victims.

But experts and federal officials say the program, begun in 2017, is barely scraping the surface of a deeply entrenched problem that the law has only just begun to address.

“That’s only a tiny drop in the bucket,” said University of Missouri School of Law professor Rigel C. Oliveri of the federal government’s settlements. “That’s a vanishingly tiny number of cases where the overall number has to be so many orders of magnitude greater.”

Most cases wind up as lawsuits because of the legal mechanics of the Fair Housing Act, Oliveri said, though a few egregious cases have gone to trial.

Victims tend to be low-income women renting from private landlords operating free of oversight, according to experts.

Meanwhile, federal officials say the only way to discover unscrupulous landlords is for tenants to come forward.

The National Fair Housing Alliance documented 2,490 complaints on the basis of sex in 2022, according to its most recent report, the highest number since the group of over 200 nationwide housing organizations and civil rights watchdogs began tracking the issue in 2005. The complaints also included discrimination based on sexual orientation or gender identity. 

Tenants can report landlords to federal officials by calling 1-800-669-9777 or at the Housing and Urban Development website.

More:Massachusetts man ordered to pay nearly $4M for sexually harassing sober home tenants

Quid pro quo in Ohio

The case of the Ohio landlord, which was settled in June, bears the hallmarks of a typical landlord lawsuit: A private operator preys on low-income women by attempting to extort them for sex and harassing them.

Between 2009 and 2020, Joseph Pedaline, a landlord in the Rust Belt city of Youngstown, offered to excuse rent in exchange for sex, forcibly touched women on the breasts and buttocks and evicted tenants who refused him, according to filings in the Northern District of Ohio.

Pedaline changed the locks on one woman who refused his quid pro quo offers; he sued to evict another tenant for not paying her water bill - which he was supposed to cover - after she told him to quit making sexual comments about her; and he locked another woman inside an apartment and groped her, the lawsuit says.

He settled the Justice Department’s lawsuit and agreed to pay $189,000 to the victims and a $10,000 civil penalty to the federal government, according to the consent order. Pedaline must also attempt to repair the credit of the victims and quit managing rental properties. 

The Justice Department’s initiative

The Ohio case is among the latest successes of the Justice Department’s Sexual Harassment in Housing Initiative.

The initiative, launched in October 2017, is overseen by the Justice Department’s Civil Rights Division and aims to enforce prohibitions against discrimination on the basis of sex in the Fair Housing Act. It addresses sexual harassment in any way related to housing, from property maintenance workers or security guards making lewd comments to loan officers sexually extorting potential homebuyers.

Federal officials announced the program amid the height of the MeToo movement and on the heels of a string of lawsuits against housing providers for sexual harassment, including subjecting female tenants to unwanted touching, sexual comments and indecent exposure.

“We are working to hold perpetrators of sexual harassment accountable for the ways in which they exploit their power and position to the detriment of women and families merely seeking access to housing opportunity,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division in response to a request for comment. “Far too often, the most vulnerable among us are preyed upon and forced to endure illegal and dehumanizing conduct in order to keep a roof over their head.”

Since its debut, Justice officials have filed 42 lawsuits, settled 32, won two favorable verdicts at trial and obtained $17.2 million in monetary damages for over 400 victims, according to senior Justice Department communications advisor Aryele N. Bradford.

Landlord calls allegations ‘hearsay’

Pedaline, a Youngstown native who began renting properties in the late 80s, called sexual harassment a serious issue - but he says he didn't do it.

“This whole Me Too thing is out of control,” Pedaline told USA TODAY. “It started out as a good thing, but now it’s gotten out of control.”

Of about a dozen allegations against him, the 72-year-old said only one was based on a police report. 

“They had one police report on all of them, and this woman was totally insane. The rest are just hearsay,” he said. “It would be different if there were 12 police reports.”

The woman called police after misconstruing his words, after he told the woman he felt was being difficult to “buy a bottle of wine and learn how to relax.”

Nearly 3,000 tenants cycled through the former landlord’s buildings, Pedaline said, adding the ones accusing him were just looking for money. 

He said he decided to settle because he couldn't afford to fight the federal lawsuit. The victims are due to receive around $15,000 from Pedaline. 

“Even though I got screwed, I just want to move on and be done with it,” he said. “Don’t ever go into a room with a woman alone; you're asking for trouble.”

Colorado landlord targets children

Matt Kirsch, the acting attorney general in Colorado who brought the case against the landlord accused of groping her tenants’ children, called arguments like Pedaline’s specious.

“We would dispute the idea that someone who has settled with us didn't have a good reason to settle with us,” Kirsch said. “We don't pursue civil remedies unless we believe that they're justified by the facts that we developed during the course of the investigation. And we don't pursue them unless we believe that ultimately we're going to be able to prevail if the matter goes to trial.”

The Colorado case concerns Kathryn Butters, a landlord in Eagle County who rented out the house next door to hers to a family that was “‘desperate’ to find housing and had nowhere else to go,” according to court filings.

Butters would show up and make sexual comments to the family’s preteen boys; she once entered the house uninvited and looked in on the older boy in the shower and groped the younger one; and she made unwanted sexual comments about the parents, the lawsuit says.

The woman agreed to pay the family $300,000, according to the consent order, which would be used to set up trust funds for the children.

The family declined to comment, citing fears of violating the consent order.

Government prosecution of landlords is dependent on tenants reporting, said Kirsch, who urged renters to reach out to local federal authorities at the Justice Department or Housing and Urban Development.

The Colorado family filed their complaint after going to a local housing authority for help finding a new place to live, Justice officials said.

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Last frontier of sexual harassment law

Oliveri, the Missouri law professor, described the cases of sexual harassment in housing as one of the last spaces where the government was still figuring out how to go after bad actors. 

The former Justice Department attorney has been following the issue for nearly 25 years and said rooting out sexual harassment in housing has come as an afterthought to stopping it in the workplace.

The difference, she said, is that in the workplace, there’s a lot more oversight.

“You have an HR department, you have co-workers but for many of the women in these situations, there’s nowhere to go except the person who holds the keys to your apartment,” Oliveri said. 

Oliveri has found in her studies of sexual harassment in housing the landlords overwhelmingly pick on low-income women in private rental housing who are afraid of complaining for fear of becoming homeless. 

The women who do call the cops also often find their reports go nowhere. 

What’s needed, according to Oliveri, is training for police to teach them to recognize the issue as criminal behavior. 

“It’s not a landlord-tenant dispute; it’s sexual assault; it’s sexual battery; it’s indecent exposure,” she said. “It’s things that if a stranger did to a stranger, it would definitely merit a law enforcement response.”

The researcher sees landlord oversight programs and training police as temporary measures for what really needs to be done: creating more housing.

“This is something that happens when housing is scarce and options are few,” she said. “If you look for it, you will find it.”

More landlord cases across U.S.

• Prosecutors settled a case in April against Iraj Shambayati, a longtime Savannah, Georgia property manager. Federal court filings had alleged instances of sexual harassment; he was ordered to pay $590,000 to the victims. 
• The Justice Department filed a lawsuit against Ariel Solis Veleta, a property manager in Albuquerque, New Mexico, in March for sexually harassing tenants. An attorney for Veleta did not immediately respond to requests for comment.
• In May, prosecutors in Massachusetts won a favorable verdict against Peter McCarthy, the operator of 14 sober homes. The 51-year-old was found guilty of sexual harassment and retaliation. He was ordered to pay $3.8 million in damages to seven victims.