Former Director of San Patricio Community Action Agency Guilty of Fraud

CORPUS CHRISTI, TX—Maria Guadalupe Paiz, the former Executive Director of the San Patricio County Community Action Agency, has pleaded guilty to one count of making and presenting more than $30,000 in false or fraudulent claims to the United States, United States Attorney Tim Johnson announced today.

At a hearing before United States District Judge John D. Rainey, Paiz, 54, of Corpus Christi but formerly of Sinton, admitted that on Sept. 24, 2004, while she was serving as the Executive Director of the San Patricio County Community Action Agency (SPCCAA), she requested the agency be reimbursed by the Department of Health and Human Services (DHHS) for payments previously made by SPCCAA when such payments had, in fact, not been made. During the hearing, the government described additional false claims Paiz made on the United States during September and October 2004, resulting in a loss to the United States of more than $142,758.71.

Community action agencies are private nonprofit organizations designated by local government to combat poverty in geographically designated areas. They are locally governed by a board composed of elected officials and community representatives which fully participates in the development, planning, implementation and evaluation of programs serving low-income communities, including programs such as Head Start, Meals-on-Wheels and aging nutrition programs and rural transport services. These agencies are largely funded by local governments to administer state and federal grant funds related to combating poverty. During Paiz’s tenure, the SPCCAA received grant funds from DHHS and the Texas Department of Transportation among others.    

Paiz’s illegal activities were largely discovered by auditors in late 2004 after she was removed as the Executive Director of the SPCCAA. Auditors found no direct financial benefit to Paiz as a result of the false claims.

Paiz faces up to five years imprisonment, a fine of up to $250,000 and up to three years of supervised release. Paiz will also be required to pay full restitution. Sentencing is set for Feb. 17, 2010 at 3:30 p.m. Paiz has been permitted to remain on bond pending her sentencing hearing. 

The investigation leading to the charges was conducted by the FBI, DHHS and the San Patricio County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Robert D. Thorpe Jr.