A new oil refinery zone is to be built in Magwe Division, a regional government minister announced this week.
Eye-witnesses said as many as 70 people attacked the houses, carrying weapons such as machetes, while some 400 by-standers watched.
Three journalists sued after a report was published alleging that local brickworks were operating illegally and destroying a riverside environment.
Denial of graft comes as incumbent chief minister threatens to sue USDP if it fails to return the missing funds.
Nay Myo Kyaw said that Magwe government had teamed up with the Union Parliament in launching an investigation into the missing funds.
Locals are calling for official assistance, as well as measures to prevent an outbreak of waterborne diseases such as dysentery.