July 2, 2014

Former Executive Director of NOAH, Stacey Jackson, Pleads Guilty to Conspiracy to Steal Government Funds and Solicit Kickbacks from Federally Funded Program

United States Attorney Kenneth Allen Polite, Jr. announced that STACEY JACKSON, age 47, a resident of New Orleans, Louisiana, pleaded guilty today before U.S. District Judge Mary Ann Vial Lemmon to conspiracy to steal federal funds and demand kickbacks from a program receiving federal funds.

According to court documents, JACKSON, the former Executive Director of New Orleans Affordable Homeownership (“NOAH”), a city agency and non-profit corporation, conspired with Earl Myers, Trellis Smith, and others to misuse and personally benefit from federal funds that NOAH had received, in violation of the law. The United States Department of Housing and Urban Development (“HUD”), both before and after Hurricane Katrina, had provided grant money to the City of New Orleans to address blight within the city and to remediate homes damaged by the storm.

JACKSON, as the Executive Director of NOAH, was responsible for the day-to-day management of the agency and determined how much each contractor would be paid. JACKSON arranged to overpay certain contractors, such as Myers and Smith, instructing them to kickback portions of the overpayments to JACKSON’S benefit.

Specifically, court documents state that on numerous occasions, JACKSON instructed Myers and Smith to pay her kickbacks out of the NOAH money she paid them for work that could not be substantiated by invoices or work actually performed. For example, in or near October 2005, JACKSON, wrote a check from NOAH to Parish Dubuclet, a company operated by her friend, Smith, for approximately $15,260, which was deposited into a bank account belonging to Smith and Parish Dubuclet. On or about October 8, 2005, Parish Dubuclet wrote a check in the amount of $10,460 to JACKSON’S father, which was deposited into a bank account that JACKSON, controlled jointly with her father. Several days later,JACKSON used this money to write a check to a tree removal service to pay for the removal of a tree from her mother’s yard.

Court documents state that from in or near December of 2006 through in or near July of 2007,JACKSON contracted with Myers to renovate properties that she owned, which were located on 6th Street and Danneel Street in New Orleans, Louisiana. JACKSON paid Myers tens of thousands of dollars toward the renovation project and used public funds belonging to the United States and distributed to NOAH to pay Myers a portion of the money she owed him for these renovations.

Documents in the court records also outline that on or about November 1, 2007, JACKSON wrote two checks to companies owned and operated by Myers. One check was for $47,899.50 to Myers & Sons. JACKSON instructed Myers to give portions of this money to different entities, such as a school thatJACKSON was affiliated with. The second check for $32,842.50 was payable to Excel Development, also owned and operated by Myers. JACKSON directed Myers to kickback a portion of this money to her by having him write two checks, one for $9,400 and one for $7,000 payable to Z.F., a person whoJACKSON knew personally and to whose checking account she had access. Myers complied with these instructions because he knew it would ensure that he would continue getting NOAH remediation work assignments from JACKSON.

Also according to court documents, on or around August 13, 14, and 15, 2008, after JACKSON became aware that Myers had received a subpoena from a federal grand jury ordering him to turn over documents supporting the work he had done for NOAH, JACKSON provided false and fraudulent documents to Myers in an effort to mislead the federal grand jury into finding that no fraud occurred at the defendant’s direction or while she was the Executive Director of NOAH.

JACKSON is scheduled to be sentenced on October 16, 2014, and faces a maximum term of imprisonment of five years, a fine of up to $250,000, and three years of supervised release.

“Today’s guilty plea stands as the most recent example of our Office’s continued vigilance in prosecuting public corruption,” stated U.S. Attorney Polite. “By diverting federal funds from those most in need in our community, Ms. Jackson’s criminal conduct further eroded public confidence in our government. On behalf of the residents of Southeast Louisiana, we will continue to demand lawful and ethical conduct from our public officials.”

“In the wake of the recent conviction of former mayor Ray Nagin and now the guilty plea of Ms. Jackson, the FBI and its law enforcement partners will continue their tireless pursuit of all those who unlawfully financially capitalize upon the Katrina tragedy event as its 10-year anniversary nears,” state Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation, New Orleans Field Office.

Special Agent in Charge Gabriel L. Grchan, IRS – Criminal Investigation, stated, “Public corruption degrades the integrity of government leadership and erodes the trust instilled in public officials by the very individuals they are appointed or elected to serve. It is a great accomplishment when an individual who has violated that trust is brought to justice. The plea ensures that Stacey Jackson will be held accountable for her misdeeds and the detriment she caused the great city of New Orleans and its citizens.”

“This guilty plea was the result of outstanding investigative work conducted by HUD-OIG, and our law enforcement partners,” stated Wyatt J. Achord, Assistant Special Agent in Charge, U.S. Department of Housing and Urban Development-Office of Inspector General. “This collaborative effort sends a clear message that if someone takes advantage of a government subsidized program they will be held accountable.”

The case was investigated by the Federal Bureau of Investigation, the Department of Housing and Urban Development—Office of Inspector General, the Internal Revenue Service Criminal Investigation, City of New Orleans—Office of Inspector General, and the United States Postal Inspection Service. The U.S. Attorney’s Office would also like to acknowledge the assistance of the Metropolitan Crime Commission.

The case was prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Fred P. Harper, Jr. and Assistant U.S. Attorney Sharan Lieberman.