U.S. Department
of Justice
Press Release
Former St. Tammany Parish Sheriff Jack Strain Charged In 16-Count Indictment for Kickback and Bribery Scheme Involving Contract for Privatization of Work Release Program in St. Tammany Parish
For Immediate Release
U.S. Attorney's Office, Eastern District of Louisiana
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that RODNEY J. STRAIN (a/k/a Jack Strain), age 56, from Abita Springs, Louisiana, was charged today by a federal grand jury in a 16-count Indictment with conspiracy to commit honest services wire fraud, soliciting a bribe, and offering a bribe in violation of 18 U.S.C. ' 371 (Count 1), honest services wire fraud, in violation of Title 18, United States Code, Sections 1343, 1346, 2 (Counts 2-13), and soliciting and receiving bribes, in violation of Title 18, United States Code, Section 666(a)(1)(B) (Counts 14-16) for his role in the privatization and operation of a work release program that operated in Slidell, Louisiana between 2013 and 2016.
According to court documents, STRAIN, who was the Sheriff of St. Tammany Parish from about 1996 to 2016, discussed with his two close associates and St. Tammany Parish Sheriff’s Office employees, David Hanson and Clifford “Skip” Keen, about Hanson and Keen becoming owners of a work release program in Slidell, Louisiana that STRAIN had decided to privatize. Because STPSO rules prohibited employees from “participating in a transaction in which he has a personal substantial economic interest of which he may be reasonably expected to know involving the governmental entity,” Hanson and Keen would have had to resign from STPSO if they wanted to assume ownership and control of the Slidell work release program. Consequently, STRAIN, Hanson, and Keen discussed ways to allow Hanson and Keen to maintain their employment and still profit from the Slidell work release program. Ultimately, STRAIN, Hanson and Keen agreed to make Keen’s adult son (J.K.) and Hanson’s adult daughter (B.H.) owners of the Slidell work release program, with the understanding that J.K. and B.H. would funnel much of the profits to Hanson and Keen. Hanson and Keen agreed to give regular payoffs to STRAIN and his selected family members from the funds they received. This understanding was based partly on STRAIN having previously required Keen to kickback to STRAIN half of the money Keen earned from a previous work release program.
STRAIN, Hanson, and Keen agreed that they needed to find another individual to actually operate the Slidell work release program because J.K. and B.H. lacked the education, training, experience, and funding to do so. They decided on an individual referred to in the indictment as “Person 2,” to whom Hanson presented a series of conditions. They mandated that J.K. and B.H. would each own forty-five (45) percent of the Slidell work release program and would each receive forty-five (45) percent of the profits, while Person 2 would only own ten (10) percent, receive ten (10) percent of the profits, and receive a salary. Person 2 would be responsible operating the Slidell work release program and for providing the capital necessary to initiate the program. On or about May 1, 2013, J.K., B.H., and Person 2 entered into an operating agreement that created St. Tammany Workforce Solutions, LLC, in which J.K. and B.H. each had a forty-five percent ownership interest and Person 2 had only a ten percent ownership interest.
On June 4, 2013, STRAIN entered into a cooperative endeavor agreement (“privatization agreement”) on behalf of STPSO with St. Tammany Workforce Solutions, LLC, a corporation designed to operate the Slidell work release program. Although J.K. and B.H. were merely straw owners who neither operated, oversaw, or administered the Slidell work release program, Person 2 was required to pay J.K. and B.H. salaries in addition to their ownership disbursements. Person 2 was also directed to pay a younger relative of STRAIN’s, referred to in the indictment as “Person 3,” who was also an employee at STPSO, approximately $30,000 per year for a no-show job at the Slidell work release program.
During the time St. Tammany Workforce Solutions, LLC operated the Slidell work release program, J.K. and B.H. received at least $1,195,000 from St. Tammany Workforce Solutions, LLC in the form of ownership disbursements, salary payments, and occasional lump sum miscellaneous payments. J.K. and B.H. converted the majority of the money they received from St. Tammany Workforce Solutions, LLC to cash, much of which they transferred to their fathers, Keen and Hanson.
Additionally, STRAIN, Hanson, and Keen understood that STRAIN would receive payoffs from Hanson and Keen in exchange for STRAIN’s conferring the right to operate the Slidell work release program on St. Tammany Workforce Solutions, LLC. The payoffs took multiple forms. First, through B.H. and J.K, Hanson and Keen, each gave STRAIN regular cash payments of at least approximately $1,000 from the monies they received from St. Tammany Workforce Solutions LLC. Second, as part of the scheme, Hanson arranged for STRAIN’s son, referred to as “Person 1,” to receive a check for $4,000 as a kickback. Third, with monies from St. Tammany Workforce Solutions, LLC, STRAIN received $2,500 in campaign funds. Fourth, with the knowledge and approval of STRAIN, St. Tammany Workforce Solutions reimbursed Hanson and Keen for personal costs incurred during trips and vacations, including trips they took with Strain.
STRAIN, Hanson, Keen, and others attempted to conceal the scheme by, among other things: (a) hiding Hanson’s and Keen’s involvement in and benefits from the Slidell work release program; (b) excluding from the cooperative endeavor agreement the fact that STRAIN would receive cash bribes and other financial compensation in exchange for signing the cooperative endeavor agreement; and (c) providing most of the money to STRAIN in the form of cash.
Hanson and Keen were charged for their roles in the scheme in November 2018. They pleaded guilty on February 27, 2019, and are currently awaiting sentencing before United States District Judge Ivan L.R. Lemelle.
If convicted, STRAIN faces a maximum term of imprisonment of five years for Count 1, twenty years for each of Counts 2 through 13, and ten years for each of Counts 14 through 16. He also faces, per count, a fine of up to $250,000, three years supervised release after imprisonment, and a mandatory $100 special assessment per count.
U. S. Attorney Strasser reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division and thanks the Metropolitan Crime Commission for its assistance. Assistant United States Attorneys Jordan Ginsberg, Supervisor of the Public Corruption Unit, and Elizabeth Privitera, Supervisor of the Violent Crime Unit, are in charge of the prosecution.
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Updated August 29, 2019
Topic
Public Corruption