FILED JAN ~ ATTORNEY FOR PLAINTIFF UNITED STATES OF AMERICA IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA BILLINGS DIVISION

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1 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 1 of 12 CARL E. ROSTAD Assistant U.S. Attorney U.S. Attorney's Office P.O. Box 3447 Great Falls, Montana Direct Line: (406) Phone: ( 406) FAX: (406) Carl.Rostad@usdoj.gov FILED JAN ~ Clerk us n...:~ DiStriet<>f~Cou.t -- -f ATTORNEY FOR PLAINTIFF UNITED STATES OF AMERICA IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA BILLINGS DIVISION UNITED STATES OF AMERICA, CR BLG- $PU) Plaintiff, vs. CHRISTA ANN McCLURE, Defendant. INDICTMENT SCHEME TO DEFRAUD, TO OBTAIN FEDERAL AND HOMEOWNER MONIES THROUGH FALSE REPRESENTATIONS/WIRE (Count I) Title 18 U.S.C (Penalty: 20 years imprisonment, $250,000 fine, and three years of supervised release) THEFT FROM AN ORGANIZATION RECEIVING FEDERAL FUNDING Title 18 U.S.C. 666(a)(l)(A) (Counts II, VIII) (Penalty: Ten years imprisonment, $250,000 fine, and three years of supervised release)

2 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 2 of 12 FEDERAL PROGRAM FRAUD/FALSE STATEMENTS 18 u.s.c (Count Ill) (Penalty: Five years imprisonment, $250,000 fine, and three years supervised release) FALSE CLAIMS ACT (Count IV-VII) 18 u.s.c. 287 (Penalty: Ten years imprisonment, $250,000 fine, and three years supervised release) THE GRAND JURY CHARGES: INTRODUCTION At all times relevant to this Indictment: 1. In October of 2007, the Eastern Montana Association of Affordable Housing (EMAAR), which later became and is hereafter known as Housing Montana (HM), a non-profit organization, received a Self Help Technical Assistance Grant-Section 523 (523) in the amount of $514,454 from United States Department of Agriculture (USDA), Rural Development (RD) to build 22 homes in two construction phases. 2. Federal monies were placed in two separate accounts: the 502 construction account, wherein funds for the actual construction and maintenance of the homes were placed, and the 523 administrative 2

3 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 3 of 12 account, the funds of which were dedicated to the payment of the administrative costs associated with providing technical and supervisor assistance to aid very low and low income families in building their own homes, and included such items as salaries, training, taxes, rent, office expense, and tools for HM. 3. Between October 16, 2008 and November 30, 2009, HM deposited $1,095,431 received from USDA/RD for the construction of 11 homes, into the HM 502 Family Trust Account. 4. Between April 11, 2008 and March 4, 2010, HM received $353,961 from USDA/RD into the HM 523 account, to administratively support the construction of the first 11 homes. 5. Defendant CHRISTA ANN McCLURE was the Executive Director for Housing Montana. COUNT I THE SCHEME That from on or about April 11, 2008, and continuing thereafter until on or about April 2, 2010, at Billings, in the State and District of Montana, and other places, the defendant, CHRISTA ANN McCLURE, having devised and intending to devise a material scheme and artifice to 3

4 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 4 of 12 defraud the United States and individual homeowners, and for obtaining money and property by means of false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice, and attempting to do so, did knowingly transmit and cause to be transmitted by means of wire, radio, and television communication in interstate and foreign commerce, writings, signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice. THE SCHEME TO EMBEZZLE FROM THE RURAL DEVELOPMENT GRANT FUNDS AND OBTAIN MONIES FROM THE HOMEOWNERS It was part of the scheme to defraud and obtain money by means of false and fraudulent statements and representations that the defendant, CHRISTA ANN McCLURE, would pay herself significant sums from the administrative (523) account for consulting services even though she was a full time employee of Housing Montana - including payments for work done before the grant was awarded - payments to her family, and payments for family expenses and personal travel. It was further part of the scheme to defraud to charge every homeowner $750 for a Technical Assistance warranty that did not exist and charge the homeowners a $1,000 fee for leasing tools that were 4

5 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 5 of 12 provided by the grant to increase the balance in the 502 account which she then transferred to the 523 account, an account over which CHRISTA ANN McCLURE had greater discretionary control. It was further part of the scheme and artifice to defraud that CHRISTA ANN McCLURE would falsely represent that she had paid to the Internal Revenue Service employer taxes and contributions on behalf of employees of the non-profit organization so that HM could be reimbursed for costs not accrued, thereby enhancing the balance of the 523 account, an account over which CHRISTA ANN McCLURE had greater discretionary control. It was further part of the scheme and artifice to defraud that CHRISTA ANN McCLURE would purchase a lap-top computer, with HM funds claiming it as a "maintenance" expense, and thereafter convert the computer to her own personal use and benefit. It was further part of the scheme and artifice to defraud that CHRISTA ANN McCLURE would issue and have issued a check from the 523 account for unused sick and annual leave substantially exceeding the hours of leave to which she would be entitled to compensation. 5

6 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 6 of 12 It was further part of the scheme and artifice to defraud that CHRISTA ANN McCLURE would issue and have issued a check from the 523 account in the amount of $21,000 to which she was not entitled. THE INTERSTATE WIRE COMMUNICATIONS Between on or about April 11, 2008, and continuing thereafter until on or about April 2, 2010, the defendant, CHRISTA ANN McCLURE, having devised and intending to devise a material scheme and artifice to defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations and promises, as described herein, and for the purpose of executing the scheme to defraud, did transmit and cause to be transmitted by means of wire, radio, and television communication in interstate and foreign commerce, writings, signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice, that is, the defendant sent, and caused federal funds to be transmitted by wire from Kansas City, in the State of Missouri, and from Philadelphia, in the State of Pennsylvania, to Billings, in the State of Montana, in violation of 18 U.S.C

7 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 7 of 12 COUNT II That between on or about April 11, 2008, and continuing thereafter until on or about December 31, 2009, at Billings, in the State and District of Montana, and other places, the defendant, CHRIST A ANN McCLURE, then the Executive Director of Housing Montana, did intentionally embezzle, misapply, and cause to be misapplied, and did knowingly obtain by fraud and cause to be obtained by fraud, and otherwise without authority converted to her own use and the use of another, property valued at $5,000 or more and under the care, custody, and control of Housing Montana, an organization receiving federal housing funds, that is, the defendant, CHRISTA ANN McCLURE, used her control over the accounts of the organization to pay herself and her family unauthorized salaries, bonuses, and other payments, family bills, payments for consulting services, a computer for personal use, and personal travel, in violation of 18 U.S.C. 666(a)(l)(A). COUNT III That between on or about September 14, 2009, and continuing thereafter until on or about March 4, 2010, at Billings in the State and District of Montana, the defendant, CHRISTA ANN McCLURE, in a 7

8 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 8 of 12 matter within the jurisdiction of the U.S. Department of Agriculture, Rural Development, an agency of the United States, made and used false writings and documents knowing the same to contain materially false, fictitious, and fraudulent statements and entries, that is, in SF 270 reports to Rural Development representing the profits and losses of Housing Montana, and claiming reimbursement for costs and expenses incurred in relation to a housing grant funded by Rural Development, indicated that the employer share of taxes and contributions had been made and paid to the Internal Revenue Service, when in truth and in fact, as CHRISTA ANN McCLURE then and there well knew, the payments had not been made and Housing Montana was not entitled to reimbursement from federal funds, in violation of 18 U.S.C. 100l(a)(3). COUNT IV That on or about September 14, 2009, at Billings, in the State and District of Montana, the defendant, CHRISTA ANN McCLURE did knowingly make and present, and cause to be made and presented, a claim upon or against the United States, and any department or agency thereof, knowing such claim to be false, fictitious, and fraudulent, that is, the defendant, CHRISTA ANN McCLURE, on a SF 270 report to the 8

9 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 9 of 12 USDA/RD, being Housing Montana's Profit and Loss Report, falsely and fraudulently claimed that Housing Montana had paid employer taxes and contributions, said representation constituting a false claim for reimbursement, in violation of 18 U.S.C COUNTV That on or about October 15, 2009, at Billings, in the State and District of Montana, the defendant, CHRISTA ANN McCLURE did knowingly make and present, and cause to be made and presented, a claim upon or against the United States, and any department or agency thereof, knowing such claim to be false, fictitious, and fraudulent, that is, the defendant, CHRISTA ANN McCLURE, on a SF 270 report to the USDA/RD, being Housing Montana's Profit and Loss Report, falsely and fraudulently claimed that Housing Montana had paid employer taxes and contributions, said representation constituting a false claim for reimbursement, in violation of 18 U.S.C COUNT VI That on or about February 8, 2010, at Billings, in the State and District of Montana, the defendant, CHRISTA ANN McCLURE did knowingly make and present, and cause to be made and presented, a 9

10 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 10 of 12 claim upon or against the United States, and any department or agency thereof, knowing such claim to be false, fictitious, and fraudulent, that is, the defendant, CHRISTA ANN McCLURE, on a SF 270 report to the USDA/RD, being Housing Montana's Profit and Loss Report, falsely and fraudulently claimed that Housing Montana had paid employer taxes and contributions, said representation constituting a false claim for reimbursement, in violation of 18 U.S.C COUNT VII That on or about March 4, 2010, at Billings, in the State and District of Montana, the defendant, CHRISTA ANN McCLURE did knowingly make and present, and cause to be made and presented, a claim upon or against the United States, and any department or agency thereof, knowing such claim to be false, fictitious, and fraudulent, that is, the defendant, CHRISTA ANN McCLURE, on a SF 270 report to the USDA/RD, being Housing Montana's Profit and Loss Report, falsely and fraudulently claimed that Housing Montana had paid employer taxes and contributions, said representation constituting a false claim for reimbursement, in violation of 18 U.S.C

11 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 11 of 12 COUNT VIII That between on or about February 1, 2010, and continuing thereafter until on or about March 26, 2010, at Billings, in the State and District of Montana, and other places, the defendant, CHRISTA ANN McCLURE, then the Executive Director of Housing Montana, did intentionally embezzle, misapply, and cause to be misapplied, and did knowingly obtain by fraud and cause to be obtained by fraud, and otherwise without authority converted to her own use and the use of another, property valued at $5,000 or more and under the care, custody, and control of Housing Montana, an organization receiving federal housing funds, that is, the defendant, CHRISTA ANN McCLURE, issued and caused to be issued to herself a check representing unused annual and sick leave which inflated the number of hours to which she was entitled to be compensated, and a $21,000 check to which she was not entitled, in violation of 18 U.S.C. 666(a)(l)(A). II II II 11

12 Case 1:14-cr SPW Document 1 Filed 01/16/14 Page 12 of 12 A TRUE BILL. FOREPERSON ited States Attorney Attorney for Plaintiff C iminal Chief Assistant U.S. Attorney Attorney for Plaintiff Baik.,... -, ~'c-~...,_.;..._~---- CSo- {bi\\\y\~s J. (o 2 0 \ L\ ~ \ D. DO Cl~ 12

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS (Kansas City Docket) Case No. 09- I N D I C T M E N T COUNT ONE THE CONSPIRACY

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS (Kansas City Docket) UNITED STATES OF AMERICA ) ) Plaintiff, ) ) v. ) ) ) aka Bill Washington ) and ) EMMA JEAN HOLMES, ) ) Defendants. )