U.S. Attorney Kenneth A. Polite announced that TRACIE MEDUS, age 39, of New Orleans, pled guilty yesterday to theft of government funds.

According to court documents, MEDUS admitted that she defrauded the federally funded Small Rental Property Program, a Louisiana Road Home program to enable low-income families displaced by Hurricane Katrina to return to Louisiana. The program provided money for landlords to repair units to be rented at specified low rates to approved low-income tenants. Road Home required that tenants be approved for income eligibility and to reside in units prior to landlords receiving funds.

MEDUS obtained preliminary approval for an award by representing to Road Home that two low-income individuals were residing in her rental property and that they were paying low, Road Home-authorized rents. To support her application, MEDUS submitted a purported lease for each tenant. The leases were false in that they indicated that MEDUS charged the authorized rents when in fact she actually charged her unwitting tenants higher, impermissible rents. Additionally, one of the leases was also false in that it listed an approved low-income tenant, when in fact a different person resided there instead.

At her January 2010 award closing, MEDUS reaffirmed that the tenant of the first unit was paying the approved rent amount, knowing that in fact she had been continually overcharging him. MEDUS also reaffirmed that she was renting the second unit to the previously reported purported tenant and charging the authorized rent. In truth, she instead had been continually renting to an unreported person and charging more than the authorized rent. Based on these renewed misrepresentations, Road Home issuedMEDUS $158,700.

When she accepted the award, MEDUS acknowledged that she could be legally required to repay it if she failed to abide by its conditions. Unbeknownst to Road Home, MEDUS immediately violated the conditions by continuing to overcharge her tenants and by renting to the unreported tenant. In October 2010, MEDUS submitted a purported lease to Road Home indicating that a new tenant would pay the authorized rent. Again, the lease was false, as MEDUS actually charged her new unwitting tenant a higher, impermissible rent.

MEDUS, who was employed as a New Orleans Police Department police officer at the time of the crime, was suspended upon being charged and resigned prior to pleading guilty. MEDUS faces up to ten years’ incarceration and a fine of up to twice the theft amount. Sentencing is scheduled for April 30, 2015 before the Honorable Mary Ann Vial Lemmon.

U.S. Attorney Polite praised the work of the Department of Housing and Urban Development—Office of Inspector General and the Federal Bureau of Investigation in investigating this matter and thanked the New Orleans Police Department’s Public Integrity Bureau and the Internal Revenue Service’s Criminal Investigation Division for their assistance. Assistant U.S. Attorney Chandra Menon is in charge of this prosecution.