Men Charged with Embezzling Money from Indian Housing Grant Program
Las Vegas, Nev. – Greg Brower, U.S. Attorney for the District of Nevada, announced today that two men have been indicted by the Federal Grand Jury on conspiracy, bribery, and embezzlement charges relating to a U.S. Housing and Urban Development (HUD) grant program which funded the development of low-income housing on Navajo Nation Indian lands in Arizona and New Mexico.
Defendants William Aubrey, 66, of Mesquite, Nevada, and Chester Carl, 52, of Gallup, New Mexico, are charged in a federal indictment returned May 19, 2009, and unsealed May 27, 2009. Both are charged with conspiracy to commit bribery relating to federal program funds and bribery relating to federal program funds. Aubrey is also charged with two counts of embezzlement and theft from Indian tribal organizations. If convicted, they each face up to five years in prison and a $250,000 fine on the conspiracy charge, and up to 10 years in prison and a $250,000 fine on the bribery charge. Aubrey also faces up to five years in prison and a $250,000 fine on each of the embezzlement and theft charges. If the defendants are convicted, the Government also seeks forfeiture of any properties of the defendants derived from proceeds of the crimes of up to approximately $8.5 million.
According to the Indictment, Chester Carl was CEO of the Navajo Indian Nation Housing Authority (Housing Authority). HUD awarded federal grant funds to the Housing Authority for the construction and maintenance of affordable housing on the Navajo Indian Nation. The Housing Authority awarded grant monies to Fort Defiance Housing Corporation, a non-profit corporation, and Fort Defiance contracted with a private housing development company, Lodgebuilder, to develop the housing projects. Lodgebuilder is owned and operated by William Aubrey.
The Indictment alleges that from about June 2002 to November 2006, Chester Carl and William Aubrey engaged in a bribery scheme in which Aubrey bribed Carl with $194,950 in casino gaming chips in exchange for favorable treatment to Aubrey's company, Lodgebuilder. In 2002 and 2003, Lodgebuilder benefitted from several contracts signed by Carl totaling over $38 million for the development of housing projects in Chilchinbeto, Arizona, Springstead, New Mexico, and Shiprock, New Mexico. Carl wrongfully permitted Aubrey and Lodgebuilder to control and use the non-profit corporation, Fort Defiance, as a "pass-through" to receive the federal HUD grant funds. About $2.2 million of the funds, which were supposed to be used to pay vendors, subcontractors and expenses at the housing developments, were converted by Aubrey for his own personal use and used for gambling, the purchase of furs and jewelry, and expenses related to thoroughbred racehorse training. Carl also caused the Housing Authority to respond favorably to inadequate disbursement requests submitted by Fort Defiance and Lodgebuilder, to Aubrey's failures to pay vendors and subcontractors, and to questions and concerns about Aubrey's business practices.
Aubrey and Carl appeared today before U.S. Magistrate Judge Leavitt and pleaded not guilty to the charges and were released on personal recognizance bonds pending trial.
The case is being investigated by the Office of Inspector General for U.S. Housing and Urban Development. It is being prosecuted by Assistant United States Attorneys Jeffrey T. Tao and Kathleen Bliss.
The public is reminded that a Indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.