The lawyer for Oak Park resident William Moorehead confirmed Monday that his client is working to reach a plea agreement with federal prosecutors on charges he defrauded the U.S. Department of Housing and Urban Development (HUD).
Moorehead, 62, of the 1000 block of North Elmwood, who was indicted this past March on two counts of wire fraud, is expected to plead guilty at his next court appearance Nov. 10 before U.S. District Judge James Zagel. Moorehead's two co-defendants have already signed plea agreements in the past six weeks.
"We're hoping to resolve the civil issues as well as the criminal issues outside of court," said his court-appointed attorney, Luis Galvan.
Moorehead and his company were found in default on Sept. 9 by Judge Suzanne B. Conlon in a separate civil case, according to Asst. U.S. Atty. Donald R. Lorenzen. The federal government had also sued Moorehead and his firm, William Moorehead and Associates in civil court, alleging the misuse of $1,564,275 in HUD project assets or income from those projects. The suit sought double the amount allegedly illegally acquired by Moorehead?#34;$3.1 million?#34;as well as attorney's fees and the cost of the audit that uncovered the alleged compensation and damages totaling $3 million. Lorenzen said Moorehead had never responded in court to the civil suit.
"He's never had a lawyer file an appearance for him or appeared himself," said Lorenzen.
The criminal indictment, unsealed in June, charged Moorehead and two former Controllers officials of his company, Brian Townsend and Patricia Taylor, with two counts of wire fraud. The alleged crimes were part of what the government was termed an elaborate "scheme to defraud" HUD through false representations, fraudulent records, and the shifting of funds from numerous accounts to other accounts to maintain a semblance of timely payments of debts related to the management of numerous Chicago Housing Authority (CHA) and HUD properties in Chicago.
In addition to the embezzlement from CHA and HUD operations, federal prosecutors charged that Moorehead stole more than $300,000 from the Marion Stamps Memorial Charity Fund while a director of that organization. The fund was established in 1997 to benefit the Marion Nzinga Stamps Youth Center, 1360 North Sedgwick, Chicago, a facility that provides numerous programs for inner-city teens that seek to counter such social ills as drug and alcohol abuse, gang participation, teen promiscuity.
In a Sept. 8 plea agreement with the office of the U.S. Attorney for Northern Illinois, Townsend pled guilty to count one of the indictment, acknowledging that he schemed with Moorehead and Taylor to defraud the HUD. The charge carries a sentence of up to five years in prison and a $250,000 fine. Under the terms of his agreement with the government, Townsend will likely received 18 to 24 months in prison when sentenced in December.
Last Thursday, Taylor, 48, agreed to a similar deal in which she admitted participating in the fraud scheme between 1999 and 2001. She will likely be sentenced by Judge Zagel to between one and two years in prison at a January sentencing hearing. According to Taylor's plea agreement, the three attempted to cover up the thefts by keeping two sets of books, one which contained inflated figures, and another that had accurate figures.
In June, Judge Sidney I. Schenkier appointed Galvan to act as counsel for Moorehead under the Federal Defender program, despite the fact that Moorehead indicated in a financial affidavit that he owns two two-flats in addition to a home valued at $500,000. Moorehead lists income between him and his wife of $6,500 a month, as well as $5,500 in rental receipts the past year.
Moorehead and Associates was the management agent for at least 14 HUD insured or subsidized apartment complexes throughout the Chicago area that total some 7,000 units. Among other properties, Moorehead and Associates has managed the Robert Taylor Homes, Lawndale Gardens, Rockwell Gardens and Island Terrace Apartments Lawndale Gardens.
The federal indictments are only the worst of Moorehead's troubles. According to Cook County Circuit Court records, Moorehead is also being sued in Cook County court for $22,000 by a Chicago Masonry company.