Former HANO CFO Sentenced to Almost Four Years for Theft

NEW ORLEANS, LA—ELIAS CASTELLANOS, age 44, formerly of Davie, Florida, (now a resident of Prescott Valley, Arizona) was sentenced today in federal court by U. S. District Judge Mary Ann Vial Lemmon to almost four years’ (46 months) imprisonment for theft from a program receiving federal funds, announced U.S. Attorney Jim Letten. Judge Lemmon sentenced the defendant at the top of the sentencing guidelines and also ordered the defendant to pay a fine in the amount of $75,000 and serve three years’ supervised release following his term of incarceration, during which time the defendant will be under federal supervision and risk additional imprisonment should he violate any terms of the release. As dictated by his plea agreement with the government, CASTELLANOS has already paid the majority of the restitution to HANO and was ordered to pay the remaining $225,000 at sentencing today.

According to court documents, CASTELLANOS pled guilty in September, 2009, admitting from approximately September, 2006 until June, 2009, while employed as the Chief Financial Officer, he embezzled approximately $900,927.00 from the Housing Authority of New Orleans (HANO), a program receiving federal funds.

Specifically, during this time period, while HANO remained in receivership under the U.S. Department of Housing and Urban Development, CASTELLANOS intentionally submitted fraudulent time sheets in his wife’s maiden name and received compensation from HANO for work his wife did not perform, even though his wife remained in Miami, Florida while CASTELLANOS was employed by HANO in New Orleans, Louisiana. 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 sentence, U.S. Attorney Jim Letten stated:

“The successful conviction and imprisonment 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 M. Donohue, Inspector General for the Department of Housing and Urban Development, said:

“This case represents a particularly egregious example where a greedy individual acting under the umbrella of service illegally enriched himself by stealing government funds he was, in fact, supposed to be monitoring, This sentencing should serve as an example that stealing limited resources from citizens so in need will not be tolerated, and will be thoroughly investigated by the HUD-OIG and our law enforcement partners.”

David Welker, Special Agent in Charge of the Federal Bureau of Investigation, added:

“Today’s sentencing should once again send a strong message to public servants whose sole reason for assuming an office is to enrich themselves at the expense of those they are sworn to serve, especially those who are most vulnerable. Today’s sentencing reinforces the commitment of the FBI, U.S. Attorney’s Office, and law enforcement partners such as HUD OIG to identify, investigate, and prosecute such acts. We simply will not tire and will not falter in our effort to rid Louisiana of corrupt practices by public officials.”

The case was investigated by the Inspector General’s Office of the United States Department of Housing and Urban (HUD-OIG) and the Federal Bureau of Investigation (FBI). 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.