Former Orange County Detective Sentenced in HUD Fraud Scheme
BEAUMONT– A 47-year-old former Orange County Sheriff’s Detective has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Chad Wayne Hogan, of Orange, Texas, pleaded guilty on Sep. 6, 2016, to money laundering and was sentenced to one year and one day in federal prison today by U.S. District Judge Marcia A. Crone.
According to information presented in court, from March 2009 to August 2015, Hogan, while employed as a detective with the Orange County Sheriff’s Office, deposited approximately 4,302 checks into a bank account at MCT Credit Union titled “Starcomm Wireless,” all of which represented proceeds from unlawful activity. Starcomm Wireless was a business once owned and operated by Hogan, but closed prior to 2009. Hogan, however, kept the Starcomm Wireless bank account open and active after the business ceased operation.
The checks were written on bank accounts held by Beverly Place apartments, Cedarwood apartments, and Villa Main apartments, all in the Port Arthur/Groves, Texas area and ranged in amount from $2 to $277, totaling $187,706. Employees of the apartment complexes would meet with Hogan, give him the checks, which he would deposit in his account. Hogan would then give approximately 2/3 of the money back to the employees, keeping the remaining 1/3 for himself. The checks Hogan received from the employees were payable to tenants of the complexes and were written under the Housing and Urban Development’s (HUD’s) utility assistance program. The HUD utility assistance program provides qualifying persons a monthly check to help offset their utility costs. However, many of the tenants at Beverly Place, Cedarwood, and Villa Main were not aware they were receiving these benefits. On-site managers at the complexes engaged in a scheme to fraudulently sign tenants up for HUD benefits without the tenants’ knowledge, and then take then use the money provided by HUD for themselves. Hogan was aware that the checks he was depositing represented the proceeds of some form of unlawful activity, and did so to disguise the nature of the funds. Hogan was also ordered to pay restitution in the amount of $187,706, as this was his portion of the scheme.
This case was investigated by the U.S. Housing and Urban Development – Office of Inspector General and Homeland Security Investigations. This case was prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.