Former Rochester Housing Authority employee pleads guilty to defrauding Rochester Housing Charities

 

Date: June 16, 2021

Contact: newsroom@ci.irs.gov

Rochester, NY — U.S. Attorney James P. Kennedy, Jr. announced today that Janice White of Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit wire fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that the Rochester Housing Authority (RHA) provided housing opportunities and services for the Rochester community. The RHA formed Rochester Housing Charities (RHC) to assist in advancing the purposes of the RHA. RHC, through the RHA, received thousands of dollars annually in assistance from the federal government. White was the Executive Secretary for the RHA from 2015 to 2020. She was also the Board Secretary for RHC and recorded the minutes for RHC board meetings.

On March 9, 2018, White started a company in Rochester called HJJ Property Development Inc. (HJJ Property), which was listed as a heating and air conditioning business. Between March 2018 and February 2019, White conspired with George Moses, RHA Chairman of the Board, to defraud RHC by falsely representing that HJJ Property was providing services to RHC when in fact it was not. To execute the scheme, White, with the knowledge of George Moses, created false invoices to make it appear that HJJ Property was a legitimate contractor that provided heating, air conditioning, roofing, and other services to RHC. The false invoices resulted in RHC paying HJJ Property for services that were never performed, overpaying HJJ Property for services that were performed by legitimate contractors, and paying HJJ Property for services that were performed by other contractors for the North East Area Development, Inc. (NEAD), not RHC. George Moses was the Executive Director of NEAD.

For example, High Performance Heating and Air Conditioning, a legitimate heating and air conditioning contractor, would provide RHC with an estimate for boiler services. George Moses would email the High Performance estimate to White who would then prepare a fraudulent and almost identical invoice from HJJ Property addressed to RHC. The fraudulent invoice made it appear that HJJ Property would perform the services for RHC that were going to be performed by High Performance. However, the amount requested to be paid on the HJJ Property fraudulent invoice would be more than what High Performance had originally requested for such services. White would then email the fraudulent HJJ Property invoices to George Moses, who authorized RHC to pay the invoices. On one occasion, White used a legitimate High Performance estimate in the amount of $9,000 to prepare a fraudulent and almost identical HJJ Property invoice to the RHC in the amount $15,000. After the work was completed by High Performance, RHC paid HJJ Property $15,000 and White used a portion of the funds to purchase a cashier's check made payable to High Performance in the amount $9,000. The difference between what RHC paid HJJ Property and what White then authorized HJJ Property pay to High Performance was the amount that White and George Moses caused RHC to fraudulently overpay for the services provided by High Performance.

On a couple of other occasions, other legitimate contractors provided NEAD, not RHC, with an estimate for services to be performed for NEAD. White then prepared a fraudulent invoice from HJJ Property addressed to the RHC, not NEAD. The fraudulent HJJ Property invoice made it appear that HJJ Property would be providing the services to RHC that were actually going to be performed by the legitimate contractor for NEAD. Further, the amount requested to be paid on the fraudulent HJJ Property invoice would be more than what the legitimate contractor was even charging NEAD for the services. RHC then paid HJJ Property for the services performed for NEAD, and White again would use a portion of the funds to purchase cashier's checks made payable to the legitimate contractor in the amount that the legitimate contractor had originally requested for the services it performed for NEAD. For example, Grant Heating and Cooling provided a legitimate estimate to NEAD in the amount of $4,340. George Moses then emailed the estimate to White who prepared a fraudulent and almost identical HJJ Property invoice to provide fake services for the RHC in the amount of $7,200.

"With this plea the defendant has admitted that she misused her positions with a public authority and charity to benefit herself and/or others," stated U.S. Attorney Kennedy. "The defendant abused her position to divert—to a sham company she created—public funds which were intended to assist underserved communities and individuals, but in so doing, she robbed those most in need of the very funds which were intended to help benefit them."

Between March and August 2018, RHC was defrauded into paying HJJ Property $87,069.

The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge, New York Field Office; the Federal Bureau of Investigation, Rochester Office, under the direction of Special Agent-in-Charge Stephen Belongia; and the Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent-in-Charge Brad Geary.

Sentencing is scheduled for January 24, 2022, before Judge Wolford.