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Joliet Housing Authority CFO accused of stealing funds from CHA

Charlene Potts chief financial officer Joliet Housing Authority was charged scheme thdefrauded Chicago Housing Authority nearly $200000.

Charlene Potts, the chief financial officer of the Joliet Housing Authority, was charged in a scheme that defrauded the Chicago Housing Authority of nearly $200,000.

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Updated: September 9, 2013 2:47PM

A Joliet Housing Authority official accused of defrauding the Chicago Housing Authority of nearly $200,000 with her husband’s help was drowning in debt and had filed for bankruptcy around the same time she was hired by the south suburban agency, court records show.

In 2010 — just a few years after Cook County prosecutors said Charlene Potts and her now estranged spouse Scott Washington embezzled the CHA — Potts, claimed she owed more than $280,000, mostly for house payments for a home in Crete, according to her bankruptcy filings.

Potts was hired by the Housing Authority of Joliet as a temporary employee to help new residents move into the Liberty Meadows development earlier in 2010, city officials said.

Potts, currently the agency’s chief financial officer, was hired full time later that year but did not start working with the finance department until August 2011, said Joliet Councilman Terry Morris, who was “very much surprised” to hear about his colleague’s arrest earlier this week.

“She seemed to have been helping [the agency], I guess. Not that she came and was the savior . . . but she seemed to work well with the board of commissioners,” Morris said.

While Potts in 2010 owed $45,000 in “educational” costs and $5,000 in credit cards and store charge accounts from businesses, including Lane Bryant and Walmart, her husband also struggled financially, records indicate.

Washington, of Park Forest, filed for bankruptcy for the second time in 2012, saying he owed $65,000, including $6,814 in child support payments to another woman, $12,000 to the IRS, $1,600 in state taxes and $13,000 in what appears to be student loans, according to his filings.

Whatever monetary problems the two had, they weren’t scraping for cash a few years earlier when Potts was working for a contractor hired by CHA, Cook County prosecutors said Wednesday.

In that job, Potts, of Richton Park, had the authority to process CHA payments to various lenders, landlords and tenants and allegedly used her login information to issue 26 phony checks worth more than $170,000 to Washington, who is in the process of divorcing Potts.

All the bogus checks issued to Washington between 2005 and 2008 were cashed at currency exchanges in Cook County or in Washington’s bank before they were quickly withdrawn, Assistant State’s Attorney Deidre Dyer said after Potts, 42, was ordered held in lieu of $50,000 bail Wednesday for being the alleged organizer of a continuing illegal financial enterprise.

Judge Laura Sullivan ordered Washington, 48, who lists his job as a supervisor at USF Holland in McCook, held in lieu of $25,000 bail.

Noting that Potts was employed by a CHA vendor before 2008, CHA spokeswoman Wendy Parks said in a statement Wednesday, “Since that time, CHA has replaced the vendor and initiated stringent managerial and financial controls over its payment processes, including extensive accounting and quality control procedures.”

Meanwhile, Joliet Mayor Tom Giarrante said Michael Simelton, interim CEO of the housing authority, is auditing Potts’ work in Joliet.

“He is having an audit and checking our books, and he sees nothing erratic about them,” Giarrante said. “So it seems like the Joliet housing authority is fine. This [legal trouble for Potts] is all solely from the Chicago Housing Authority.”

Morris also confirmed that the Joliet Housing Authority will meet in a special session Thursday concerning termination of an employee.

Potts’ alleged scheme makes the scandal that claimed the CHA’s former CEO Lewis Jordan look like chicken feed.

A few months after taking office, Mayor Rahm Emanuel forced Jordan’s resignation amid allegations that he misused an agency-issued credit card.

The card issued to Jordan had been used to pay for costly meals at Gibsons and other posh restaurants. The findings prompted Emanuel to cut from 500 to 30 the number of credit cards used by local government agencies.

Charles Woodyard, public housing chief in Charlotte, N.C., made the giant leap to Chicago with a promise to “think outside the box” and provide more support services for displaced CHA residents.

Woodyard needed creative and unconventional thinking to succeed in his new, $216,000-a-year job.

The $1.6 billion Plan for Transformation that tore down CHA high-rises and replaced them with mixed-income communities had already fallen five years behind schedule because of the collapse of the real estate market.

Contributing: Cindy Cain

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