PRG Real Estate's $1.59 Million Settlement: The Largest SCRA Case Against a Property Manager

In March 2019, the Department of Justice announced that PRG Real Estate Management and several related entities would pay up to $1,590,000 to resolve allegations of Servicemembers Civil Relief Act violations. At the time, this was the largest SCRA settlement the DOJ had ever obtained against a landlord or property management company.

The case revealed something worse than negligence: PRG had filed 152 false affidavits with Virginia courts, either stating that tenants were not in the military or failing to disclose their military status, when the tenants were, in fact, active-duty servicemembers.

What Happened

From 2006 to 2017, over a decade, PRG obtained at least 152 default judgments against 127 SCRA-protected servicemembers in Virginia state courts. These were eviction proceedings and money judgments filed against tenants who were serving on active duty.

Under the SCRA, before a court can enter a default judgment against a defendant who might be in military service, the plaintiff must file an affidavit with the court stating whether the defendant is in the military. If the defendant is on active duty, the court must appoint an attorney to protect their interests before proceeding.

PRG either filed affidavits falsely stating that tenants were not in the military, or filed affidavits that failed to accurately disclose the tenants’ military status. In both cases, the courts entered default judgments based on false information.

The DOJ launched its investigation after Navy legal assistance attorneys in Norfolk, Virginia, reported that PRG had obtained eviction and money judgments against servicemember-tenants by filing these inaccurate affidavits.

The Settlement

PRG agreed to:

• Pay up to $1,490,000 to compensate 127 servicemembers who had 152 unlawful default judgments entered against them
• Pay $34,920 to compensate 10 additional servicemembers who were charged early lease termination fees in violation of the SCRA
• Pay a $62,029 civil penalty to the United States
• Repair the credit of all affected servicemembers
• Provide SCRA training to all employees
• Develop new SCRA compliance policies and procedures
• Implement DMDC verification before filing any future court actions

Total: $1,590,000 for 127 servicemembers across 152 default judgments.

What Went Wrong

PRG’s process had two failures.

First, the company did not verify military status before filing court actions. The DMDC database was available and free to use, but PRG’s eviction workflow did not include a verification step. When a tenant was delinquent, PRG filed for eviction without checking whether the tenant was protected by the SCRA.

Second, PRG filed affidavits with false or incomplete information about tenants’ military status. Every eviction filing in Virginia requires a military status affidavit. PRG either stated that tenants were not in the military (false) or failed to provide the required information (incomplete). Either way, the courts received inaccurate information and entered default judgments against servicemembers who should have been protected.

This continued for eleven years, from 2006 to 2017, before the DOJ intervened.

The False Affidavit Risk

Under 50 U.S.C. Section 3931(c), filing a false affidavit of military status is a federal offense. This is not just a compliance failure. It is potentially criminal conduct.

Every eviction, every repossession, every court action requires a military status affidavit. If you state that the defendant is not in the military, and they are, you have filed a false affidavit with a court. The DMDC check is the only reliable way to ensure the affidavit is accurate.

PRG’s case is the clearest illustration of this risk in SCRA enforcement history: 152 false affidavits, 127 servicemembers, $1.59 million.

What Would Have Prevented It

A single workflow change: verify military status through DMDC before filing any court action. If the DMDC returns a positive result, halt the filing and route the case to a compliance review.

Had PRG checked military status before each of the 152 filings, every one of those filings would have been flagged. The affidavits would have been accurate. The courts would have appointed attorneys for the servicemembers. And PRG would have avoided $1.59 million in penalties and eleven years of violations.

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Sources: DOJ Press Release, March 15, 2019 (justice.gov/archives/opa/pr/justice-department-obtains-its-largest-ever-settlement-against-property-management-company); DOJ Case Page (justice.gov/crt/case/united-states-v-prg-real-estate-management-ed-va)