Oak Park resident William Moorehead was sentenced to four years in federal prison Friday.
Brushing aside a plea for a more lenient sentence involving incarceration and house arrest, Federal Judge James Zagel ordered Moorehead, who faced between 46 and 57 months in prison under federal sentencing guidelines, to turn himself in to authorities to begin serving his sentence by July 12.
Moorehead, 64, of the 1000 block of North Elmwood Avenue, entered into a plea agreement with prosecutors a year ago, admitting guilt in two counts of fraud contained in a June 2005 indictment. That indictment charged Moorehead and two associates with engaging in a scheme to defraud the U.S. Department of Housing and Urban Development of at least $995,000 between early 1994 and August 2002.
At one time William Moorehead and Associates managed 14 HUD-insured or -subsidized apartment complexes throughout the Chicago area totaling approximately 7,000 units.
Moorehead’s alleged fraud and mismanagement was uncovered in the course of an audit conducted by HUD’s inspector general in 2003 and 2004.
Moorehead was to have been sentenced by Zagel last June, but asked for leniency from the court. In a sentencing memorandum filed last September, his lawyer, Federal Public Defender Luis Galvan, asked for leniency from Zagel, arguing that the case represented a “unique regulatory backdrop.”
Moorehead, his attorney argued, had faced extenuating circumstances in dealing with cash flow problems created by HUD’s payment schedules. HUD, he said, often didn’t make payments to Moorehead’s firm for up to 90 days, despite significant ongoing payroll, utility and contractor expenses. Once Moorehead reportedly used $190,000 in personal funds to cover contractor expenses on a project.
Moorehead admitted to making “a huge mistake,” and that he had engaged in illegal conduct. He expressed remorse and said that he hadn’t intended to defraud anyone.
“I know what I did was wrong, but it was not to intentionally hurt anyone,” he stated in the plea agreement. “It was very bad business practice, and a way to keep cash flow for the projects.”
Moorehead noted the case had devastated him personally and professionally. His wife filed for divorce after he was indicted. In January 2005, Moorehead signed a consent agreement settling a civil lawsuit brought by the federal government to recover the stolen funds. Under the terms of that agreement, Moorehead and his firm admit that they had engaged in fraudulent actions and accepted personal and corporate liability for the violations, including the payment of at least $3,128,550 in restitution and penalties.
In February 2006, the federal government obtained a $2.8 million judgment against Moorehead that included his Oak Park home.
In addition, Moorehead noted that he continues to need to expend considerable time and expense in caring for a seriously medically impaired adult son who is in his care.
“The unusual facts of this case remain an important consideration in assessing the nature of the offense, his culpability, and determining his sentence,” wrote Galvan.
Zagel’s sentencing decision may have been influenced by Moorehead’s admission that he stole more than $300,000 from the Marion Stamps Youth Center on the near north side. While serving as the chairman of the board of the youth center, which provides daycare services and teaches life skills to disadvantaged youth, Moorehead reportedly wrote checks to himself and his business from the center’s checking account.
As part of his sentence, he was ordered to immediately pay the final $19,991 due the youth center.