Woman gets 3-year prison term for housing authority fraud

A 41-year-old Washington woman was sentenced Thursday to three years in federal prison for her role in conspiring to steal $1.4 million from the Housing Authority of Baltimore City, the U.S. Attorney's Office in Maryland announced.

In imposing his sentence, U.S. District Judge William D. Quarles, Jr. also ordered Tyeast "Peaches" Brown to serve four years of supervised release after her prison term and to pay the public housing agency at least $1.4 million in restitution. She earlier pleaded guilty.

Two others, Keith Eugene Daughtry, 50, and William Darden, 45, both of Washington, pleaded guilty to their roles in the theft scheme, which prosecutors say took place over three months in summer 2010. Daughtry received a 41-month prison term and was ordered to pay restitution. Darden is awaiting sentencing.

According to prosecutors, at least $1.4 million in housing authority funds were electronically transferred to an entity called Keith Daughtry Contracting LLC, which never did work for the agency. The transfers occurred after Darden opened a bank account for Daughtry Contracting using a fraudulent driver's license bearing his photo but Daughtry's name.

After getting hold of housing authority money, the conspirators drained the stolen funds by putting some on debit cards in the names of others, transferring some to other banks and making ATM withdrawals in the Washington area, prosecutors said.

Brown's role was to recruit a number of people, mostly young women, who opened debit cards in their own names. Stolen housing authority money was transferred onto these debit cards.

"Brown then directed her recruits to withdraw most of these funds off the debit cards through cash withdrawals, and demanded that the recruits provide her with this cash, though she permitted them to keep amounts for themselves," according to a release from the U.S. Attorney's Office. "Brown, in turn, divided the cash with her conspirators."

She periodically checked the account balances on the debit cards in her recruits' names, the release added.

Baltimore's housing agency has said it was fully reimbursed by Bank of America after discovering the scheme. In January it said agency accountants identified the fraud during "routine reconciliation" of its books and that officials notified both the agency's inspector general and the bank.

A fourth person, DaRen Kareem Gadsden of Upper Marlboro, went to trial recently, ending in a hung jury. Gadsden is scheduled for retrial next June, according to the U.S. Attorney's Office. Gadsden's alleged role was detailed in an indictment unsealed in January.

scalvert@baltsun.com

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