United States Attorney's Office District of Connecticut
Press Release

TWO FORMER NEW HAVEN HOUSING AUTHORITY EMPLOYEES INDICTED FOR CONSPIRACY AND FRAUD

Kevin J. O’Connor, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned a five-count Indictment charging GREGORY L. WEBB, age 55, of West Hartford, formerly of Rocky Hill, Connecticut, and COREY L. NEWTON, age 36, of 234 Crescent Street, New Haven, with one count of conspiracy to defraud the United States and to commit offenses against the United States, one count of fraud and misapplication of federal funds, and multiple counts of making false and fraudulent statements to the U.S. Department of Housing and Urban Development. WEBB and NEWTON are both former employees of the Housing Authority of the City of New Haven.

The Indictment was returned on March 30, and was ordered unsealed today by United States Magistrate Judge Donna F. Martinez in Hartford after WEBB’s surrender and during his initial presentment this afternoon. WEBB was released after posting a bond in the amount of $25,000. NEWTON was arrested on April 13 and is released on a $100,000 bond.

According to the Indictment, WEBB was the Housing Authority Asset Manager for District One, and was responsible for managing properties owned by the Housing Authority within District One. WEBB had authority over a multimillion dollar line-item budget, which consisted primarily of federal funds. WEBB’s responsibilities included determining the need for maintenance and vacancy work, determining whether the work should be done internally by Housing Authority employees or by an outside contractor, developing the “scope of work” for any such work, obtaining bids from qualified contractors, and recommending and selecting which contractors should perform the work. WEBB was also responsible for verifying that work for which contractors submitted bills or invoices to the Housing Authority was completed to the Housing Authority’s satisfaction. WEBB was also responsible for authorizing payment of invoices within a certain dollar amount submitted by contractors.

NEWTON was a mechanic employed by the Housing Authority in District One, and he worked under WEBB’s supervision.

The Indictment alleges that, from about October 2002 to about August 2003, WEBB and NEWTON conspired to obtain funds from the U.S. Department of Housing and Urban Development (“HUD”) and the Housing Authority through Unlimited Horizons, an entity that WEBB and NEWTON secretly controlled, and to conceal their involvement with and control of Unlimited Horizons from HUD and the Housing Authority through materially false and fraudulent misrepresentations and omissions.

The indictment alleges that WEBB and NEWTON recruited co-conspirators to serve as nominee owners of Unlimited Horizons, and that WEBB recommended that Unlimited Horizons be placed on the Housing Authority’s approved list of contractors. WEBB issued Invitations to Bid, which included a Scope of Work, for Housing Authority projects on which Unlimited Horizons would submit bids. NEWTON caused bids to be submitted on behalf of Unlimited Horizons to WEBB on Housing Authority projects that were under WEBB’s authority. The bids would falsely state that a nominee was the president of Unlimited Horizons, and WEBB would recommend that Unlimited Horizons be selected to do Housing Authority projects that were under his authority.

The Indictment further alleges that NEWTON would submit claims under the names of the nominee owners of Unlimited Horizons for payment by the Housing Authority. WEBB then authorized payment on claims submitted by NEWTON and Unlimited Horizons under the names of the nominee owners. WEBB and NEWTON directed co-conspirators to open bank accounts for the purpose of receiving funds that were paid to Unlimited Horizons by the Housing Authority and concealing their involvement with and control of Unlimited Horizons.

If convicted on each count, WEBB faces a maximum term of imprisonment of 30 years and a fine of up to $1.25 million, and NEWTON faces a maximum term of imprisonment of 25 years and a fine of up to $1,000,000.

“The charges alleged in this indictment demonstrate that the U.S. Attorney’s Office is committed to investigating and prosecuting public employees and private citizens who scheme to profit from corrupt management of federally-funded programs,” U.S. Attorney O’Connor stated.

U.S. Attorney O’Connor stressed that the indictment is only a charge and not evidence of guilt. The defendants are entitled to a fair trial in which it is the Government’s burden to prove guilt beyond a reasonable doubt.

“This joint prosecutorial effort by the U.S. Attorney’s Office, HUD’s Office of Inspector General, U.S. Postal Inspection Service, and the New Haven Police Department has helped send a strong message that those who seek to unlawfully profit by defrauding programs within HUD will be vigorously prosecuted,” stated Kenneth M. Donohue, Inspector General for the U. S. Department of Housing and Urban Development.

The case was investigated by U.S. Department of Housing and Urban Development, Office of Inspector General, the U.S. Postal Inspection Service and the New Haven Police Department. The case is being prosecuted by Assistant United States Attorney Eric J. Glover.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov