Former Orange County Detective Guilty in HUD Fraud Scheme
BEAUMONT, Texas – 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 to an Information charging him with money laundering today before U.S. Magistrate Judge Keith Giblin.
According to information presented in court, from March 2009 to August 2015, Hogan deposited approximately 4,302 checks written on bank accounts held by Beverly Place Apartments, Cedarwood Apartments, and Villa Main Apartments, all in the Port Arthur/Groves, Texas area. Hogan deposited the checks in an account he had sole control over after receiving them from Shalana Murphy, the property manager at Beverly Place apartments. After depositing the checks, Hogan would give Murphy a portion of the checks in cash and keep a portion for himself. The checks were actually payable to tenants of the three apartment complexes and were written under the Housing and Urban Development’s (HUD) utility assistance program. The utility assistance program provides qualifying persons a monthly check to help offset their utility costs. However, many of the tenants at the three apartment complexes were not aware they were receiving these benefits. On-site managers at the complexes, including Shalana Murphy, engaged in a scheme to sign tenants up for HUD utility assistance benefits, and then take the checks for themselves. While Hogan was not involved directly with the scheme to defraud HUD, he deposited the fraudulently obtained checks an account he controlled and provided Murphy with cash, keeping a portion of the proceeds for himself. Hogan was aware the checks he was depositing represented the proceeds of unlawful activity. The United States is also seeking a monetary judgment of $187,706, from Hogan as this was his portion of the scheme.
Under federal statutes, Hogan faces up to 20 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress and is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the U.S. Housing and Urban Development – Office of Inspector General and Homeland Security Investigations. This case is being prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.