Home New Orleans Press Releases 2009 Former HANO CFO Pleads Guilty to $900,000 Theft

Former HANO CFO Pleads Guilty to $900,000 Theft

U.S. Attorney’s Office September 23, 2009
  • Eastern District of Louisiana (504) 680-3000

ELIAS CASTELLANOS, age 43 of Davie, Florida, pled guilty before United States District Judge Mary Ann Vial Lemmon to a Bill of Information charging him with theft from the Housing Authority of New Orleans (“HANO”), a program receiving federal funds, announced U.S. Attorney Jim Letten.

According to the Bill of Information and factual basis which the defendant admitted to in open court, from approximately September 2006 until June 2009, CASTELLANOS, while employed as the Chief Financial Officer of HANO, embezzled approximately $900,927.00 from HANO. During this time period, CASTELLANOS, while acting as an agent and CFO for HANO and while HANO remained in receivership under the United States Department of Housing and Urban Development, intentionally submitted fraudulent time sheets in his wife’s maiden name. CASTELLANOS submitted these fraudulent time sheets even though his wife remained in Miami, Florida while CASTELLANOS worked in New Orleans, Louisiana with HANO. CASTELLANOS billed and received compensation from HANO for work his wife did not perform. During this time period, CASTELLANOS’s fraudulent submissions concerning his wife totaled $655,710.00. In addition to over-billing hours under his wife’s maiden name, CASTELLANOS also billed false hours to HANO in various means totaling $245,217.00.

Speaking to today’s guilty plea, United States Attorney Jim Letten stated:

“The successful conviction today of a corrupt HANO executive who used his position to violate the public trust and steal from those vulnerable citizens who trusted him, is compelling evidence of our continuing, unrelenting war against corruption and abuse of power by public officials. Stated simply, we will aggressively pursue anyone who steals from the public they serve in an effort to protect those people among us who most desperately need and rely on public assistance provided by the American taxpayers. Such investigations will continue.” Kenneth Dohonue, HUD Inspector General added:

“Public corruption in public housing undermines the social stability of what is home to dozens and sometimes hundreds of families. To the extent that we can stop these destructive practices, the HUD OIG will be a defender of the notion that people in public housing should be able to enjoy a well-administered safe and decent home.”

David Welker, Special Agent in Charge, FBI New Orleans Field Office stated: “The people of Louisiana should continue to be outraged and offended that public servants continue to steal money intended for those less fortunate and those who truly need it and should make every effort to identify those stealing the money and report them to authorities so appropriate investigations and prosecutions continue and we prevent future fraud.”

In addition to the guilty plea, CASTELLANOS has agreed to a plea agreement with the Government which includes his cooperation in this and other matters.

Judge Lemmon set sentencing in this matter for December 17, 2009, at 2:00 p.m. The defendant faces a maximum prison term of 10 years and a fine of twice the gain to the defendant, as well as restitution and supervised release of three (3) years.

The case was investigated by the Inspector General’s Office of the United States Department of Housing and Urban and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Matthew Coman, Supervisor of the General Crimes/Fraud Unit of the United States Attorney’s Office.

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