February 13, 2002 at 11:47 PM EST - Updated July 3 at 5:00 PM
By JOE MILICIA, Associated Press Writer
CLEVELAND (AP) - A former housing official was convicted Wednesday of using thousands of public dollars for personal use.
Claire Freeman, 58, headed the Cuyahoga Metropolitan Housing Authority for eight years before being fired in 1998.
A U.S. District Court jury convicted Freeman of mail fraud, theft of public money and false statements regarding a loan. Judge Kathleen McDonald O'Malley allowed Freeman to remain free on bond until sentencing on April 24.
Assistant U.S. Attorney Thomas Getz estimates Freeman will get 1½ to four years based on federal sentencing guidelines.
Federal prosecutors said CMHA board members never authorized the use of agency money for mortgage payments on her townhouse in Alexandria, Va. Prosecutors also said Freeman used forged letters from the CMHA board to get a bank loan and to refinance her mortgage.
Freeman was charged with using agency money to pay off a $50,000 personal loan and make $62,000 in mortgage payments. In 1999 a jury in state court ruled she had defrauded CMHA and owed $462,200.
A former CMHA commissioner testified in court last week that she never signed letters authorizing the mortgage payments.
FBI agent Shane Sims testified that he arranged for Freeman to provide him with a handwriting sample because some board members believe their signatures had been forged.
When Freeman was asked to write the name of a board member, she misspelled the name in the same manner as it was misspelled in a letter to Merrill Lynch containing the board member's disputed signature.
"I think that was a very telling piece of evidence," Getz said. "The Merrill Lynch document was so obviously fraudulent."
Freeman testified that she believed the mortgage payments were to be part of a relocation package and that they had the approval of the CMHA board.
Her attorney, James Willis, said when the CMHA board sought her to run the troubled agency, it ensured her she would not lose money on the recently purchased town house. She had been an assistant secretary for the U.S. Department of Housing and Urban Development in Washington.
Willis told jurors that the letters from the CMHA board were legitimate and based on resolutions passed during board meetings.
Freeman was one of the highest paid housing directors in the country when she was hired in May 1990. By 1997, her compensation totaled more than $400,000.
Because the U.S. Department of Housing and Urban Development would not agree to her high salary, CMHA had to pay a portion of it without using federal funds, Getz said.
Freeman suggested using a seldom touched fund for the excess compensation and put $2.5 million into it by 1994, Getz said. By 1996, it was reduced to $81,000 without a single housing unit built.
Ronnie Davis, CMHA's chief operating officer under Freeman, had been a co-defendant with Freeman but pleaded guilty to a misdemeanor misappropriation charge for keeping a $5,500 overpayment in his paycheck.
(Copyright 2002 by The Associated Press. All Rights Reserved.)