A Massachusetts man who at one point operated 14 sober homes has been found liable for sexual harassment after he offered housing benefits to female residents in exchange for sexual favors, the U.S. Attorney's Office announced.

Following a five-day trial, a federal jury in Boston found Peter McCarthy, 51, liable on May 17 for sexual harassment and retaliation in violation of the Fair Housing Act, the U.S. Attorney's Office for the District of Massachusetts said in a news release Monday. The Fair Housing Act is a federal law that prohibits discrimination — including sex discrimination — by direct housing providers, such as landlords and real estate companies.

McCarthy, of Lynn, Massachusetts, was the owner and operator of Steps to Solutions Inc., a group of residential sober homes, according to court documents. For nearly a decade, McCarthy sublet properties to people recovering from addiction in Massachusetts and sexually harassed female tenants, prosecutors said.

He was ordered to pay $3.8 million in damages to seven victims who rented from him, the U.S. Attorney’s Office added. The jury award includes compensatory damages for the emotional harm the victims suffered as a result of McCarthy’s conduct in addition to punitive damages to punish McCarthy.

The Department of Justice also intends to seek a civil penalty against McCarthy and a court order to prevent him from managing Steps to Solutions sober homes or having contact with residents or prospective tenants.

“(McCarthy) preyed on vulnerable women in recovery from addiction and forced them to choose between his sexual demands and keeping a roof over their heads," Acting U.S. Attorney Joshua Levy said in a statement. "Housing is a fundamental need and every person has the right to feel safe and secure in their own home. No one should be denied housing because of their refusal to submit to unwanted sexual harassment and intimidation. This case should send a powerful message to all landlords that there are severe consequences to sexually exploiting tenants.”

The case is the latest effort by federal and state authorities to hold housing providers accountable for sexual harassment. In 2017, the Department of Justice in collaboration with U.S. Attorneys’ Offices across the nation launched the Sexual Harassment in Housing Initiative.

"The goal of the initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing," according to the Justice Department.

Since launching the initiative, the department said it has filed 40 lawsuits alleging sexual harassment in housing and recovered over $16.4 million for victims.

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Massachusetts man sexually harassed female tenants from 2012 to 2021

McCarthy was also convicted in 1992 of indecent assault and battery, a crime that required him to register as a sex offender, according to court documents. He was on the Massachusetts sex offender registry from 2004 to 2015.

In 2021, the U.S. Attorney’s Office for the District of Massachusetts and the Department of Justice’s Civil Rights Division filed a lawsuit accusing McCarthy of sexually harassing female tenants in violation of the Fair Housing Act.

According to the lawsuit, McCarthy formed Steps to Solutions in 2012 and operated multiple residential properties as "sober homes." McCarthy did not own any of the residential properties he operated as sober homes, and instead rented the properties from owners and then sublet to residents.

At the time, the lawsuit said McCarthy operated seven homes with a total of about 85 beds in Lynn and Boston. He also previously operated at least seven additional properties as sober homes in other Massachusetts communities, including Boston, Dorchester, Brockton, and Fall River.

The lawsuit alleged that McCarthy sexually harassed female residents of his sober homes from at least 2012 through 2021. Such conduct occurred in multiple sober homes in Brockton, Dorchester, and Lynn.

Prosecutors said McCarthy offered to forgive or reduce rent, grant extra house privileges, or waive security deposits in exchange for engaging in sex acts or sending sexually explicit photographs. He was also accused of making unwanted sexual comments toward his tenants and retaliating against those who reported his conduct.

Court documents described several incidents, including a text exchange in which McCarthy allegedly told a tenant he didn’t like that someone else was hitting on her, saying: "You are my Steps girl." He then offered to wash the tenant’s back and requested that she send him a picture of her in the shower.

In another incident in 2017, a female resident asked McCarthy for an overnight pass so she could spend the night at her mother’s house and visit her daughter. McCarthy said he would give her the pass if she made him "breakfast," which she understood as an exchange for sex.

Then in 2019, McCarthy sent sexually explicit text messages to a female tenant and asked for sexually explicit photographs in return. The tenant said she sent McCarthy a photo because she was behind on rent and feared that she would be kicked out.

Sexual harassment in housing

Sexual harassment in housing is a form of sex discrimination that is prohibited by the Fair Housing Act, according to the Department of Housing and Urban Development. Though victims can file complaints in these cases, experts have said sexual harassment in housing is an overlooked and significant problem in the United States.

University of Louisville Associate Professor Theresa Keeley said in a 2006 article that advocates and attorneys have expressed concern over the underreporting of sexual harassment in housing. The "number of tenants who sought legal assistance did not reflect the extent of the problem," according to Keeley.

A Missouri Law Review pilot study published in 2018 included interviews with randomly selected, low-income women. The study found that 10% of the sample reported being sexually harassed by their landlords.

All of the women were living in private rental housing at the time they were harassed, according to the study. The harassment they experienced included being asked for sex in exchange for rent, home invasions, indecent exposure, and unwanted touching.

While there have been published cases about the issue and federal authorities are pursuing action against alleged harassers, the study noted that crucial data is still missing. 

"Unlike sexual harassment in the workplace, which has been exhaustively studied by academics of every stripe, there have been no reliable empirical studies about the nature and prevalence of sexual harassment in housing," according to the study.

Recent cases by the Justice Department

The Department of Justice’s Sexual Harassment in Housing Initiative said it hopes to increase awareness about sexual harassment in housing and that the department is investigating these incidents.

Between January and May of this year, federal authorities have announced six cases involving sexual harassment in housing, including McCarthy’s.

Last month, the department said a Michigan landlord agreed to pay $185,000 in damages to eight former and prospective female tenants after he was accused of tenants housing-related benefits in exchange for engaging in sex acts with him.

In March, the department sued a New Mexico property manager and accused him of sexually harassing female tenants between 2010 and 2022. Prosecutors alleged that he "locked female tenants in his office to demand sex acts, demanded that female tenants engage in sex acts with him in order not to lose housing, and entered female tenants’ homes in the guise of conducting property management work to demand sex acts."

A similar lawsuit was also filed in January against a landlord in Oklahoma, according to the department.

In February, the department secured agreements with landlords in Alabama and Wisconsin. The landlords were ordered to pay hundreds of thousands in damages and civil penalties after they were accused of sexually harassing multiple female tenants, according to the department.

If you or someone you know has experienced sexual violence, RAINN’s National Sexual Assault Hotline offers free, confidential, 24/7 support to survivors and their loved ones in English and Spanish at: 800.656.HOPE (4673) and Hotline.RAINN.org and en Español RAINN.org/es.