Former Orange County detective pleads guilty in fraud scheme

Former Orange County detective pleads guilty in fraud scheme

U.S. Attorney for the Eastern District of Texas John M. Bales announced Tuesday, Sept. 6, that a now former Orange County Sheriff’s Office Deputy has pleaded guilty to being part of a scheme to collect hundreds of thousands of dollars in ill-gotten HUD housing proceeds in Jefferson County.

Tuesday, 47-year-old Chad Hogan pleaded guilty to charges of money laundering before U.S. Magistrate Judge Keith Giblin for his role in the crime.

Information presented in court and provided by Bales’ office proved that, “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 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.”

The government further argued that many of the tenants at the three apartment complexes were not aware they were receiving HUD utility 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,” Bales’ office reported. “While Hogan was not involved directly with the scheme to defraud HUD, he deposited the fraudulently obtained checks into 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 federal government is also seeking a monetary judgment of $187,706 from Hogan - as this was his portion of the scheme, according to the information presented thus far in the case. Under federal statutes, Hogan faces up to 20 years in federal prison at sentencing. 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 and prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.