Date: December 1, 2021 Contact: newsroom@ci.irs.gov NEW ORLEANS — U.S. Attorney Duane A. Evans announced that former long-time St. Tammany Parish sheriff Rodney J. Strain (a/k/a Jack Strain) from Abita Springs, Louisiana, pleaded guilty today before United States District Judge Jane Triche Milazzo to Count 15 of the Indictment returned in August 2019, charging him with soliciting and receiving bribes, in violation of Title 18, United States Code, Section 666(a)(1)(B) for his role in the privatization and operation of a work release program that operated in Slidell, Louisiana between 2013 and 2016. According to court documents, Strain, who was the sheriff of St. Tammany Parish from about 1996 to 2016, had the unilateral authority to decide whether Parish-run work release programs (i.e., halfway houses) would be operated by the Sheriff's Office or private entities and to choose which private entities would be granted the right to operate privately-run halfway houses. In about early 2013, STRAIN decided to privatize a work release program in Slidell, Louisiana. He discussed with his two close associates and Captains with the St. Tammany Parish Sheriff's Office (STPSO), David Hanson and Clifford "Skip" Keen, the prospect of Hanson and Keen becoming joint owners of the Slidell work release program. However, St. Tammany Parish Sheriff's Office employees advised STRAIN that state law prohibited Hanson and Keen from owning and operating the Slidell work release program while employed at STPSO. As a result, since state law prohibited employees from "participating in a transaction in which he has a personal substantial economic interest of which he may be reasonably expected to know involving the governmental entity," Hanson and Keen would have had to resign from STPSO if they wanted to assume ownership and control of the Slidell work release program. Thus, they would be obliged to forfeit their salaries and pension increases from continued employment with STPSO to become joint owners. Strain, Hanson, and Keen discussed ways to allow Hanson and Keen to maintain their employment and still profit from the Slidell work release program. To conceal their scheme, Strain, Hanson, and Keen agreed to make Keen's adult son (J.K.) and Hanson's adult daughter (B.H.) owners of the Slidell work release program, with the understanding that J.K. and B.H. would funnel much of the profits to Hanson and Keen. Hanson and Keen agreed to give regular payoffs to Strain and his selected family members from the funds they received. This understanding was partly based on Strain having previously required Keen to kickback to STRAIN half of the money Keen earned from an earlier place of employment. Strain, Hanson, and Keen agreed that they needed to find another individual to actually operate the Slidell work release program because J.K. and B.H. lacked the education, training, experience, and funding to do so. They decided on Person 2, to whom Hanson presented a series of non-negotiable pre-conditions, including the following: J.K. and B.H. would each own forty-five (45) percent of the Slidell work release program and would each receive forty-five (45) percent of the profits, while Person 2 would only own ten (10) percent, receive ten (10) percent of the profits, and receive a salary. Person 2 would be responsible for operating the Slidell work release program and for providing the capital necessary to initiate the program. On or about May 1, 2013, J.K., B.H., and Person 2 entered into an operating agreement that created St. Tammany Workforce Solutions, LLC, in which J.K. and B.H. each had a forty-five percent ownership interest and Person 2 had only a ten percent ownership interest. On June 4, 2013, Strain entered into a cooperative endeavor agreement ("privatization agreement") on behalf of STPSO with St. Tammany Workforce Solutions, LLC, a corporation designed to operate the Slidell work release program. Thereafter, Person 2 was directed to make additional unnecessary financial expenditures. For example, although J.K. and B.H. were merely straw owners who neither operated, oversaw, or administered the Slidell work release program, Person 2 was required to pay J.K. and B.H. salaries in addition to their ownership disbursements. Person 2 was also directed to pay Person 3, who was an employee at STPSO and Strain's relative, approximately $30,000 per year for a no-show job at the Slidell work release program. During the time St. Tammany Workforce Solutions, LLC operated the Slidell work release program, from July 1, 2013, through July 1, 2016, J.K. and B.H. received not less than $1,384,000 from St. Tammany Workforce Solutions, LLC in the form of ownership disbursements, salary payments, and occasional lump sum miscellaneous payments. J.K. received at least 148 payments totaling at over $676,000, while B.H. received at least 133 payments totaling over $708,000. J.K. and B.H. converted the majority of the money they received from St. Tammany Workforce Solutions, LLC to cash, much of which they transferred to their fathers, Keen and Hanson. Additionally, Strain, Hanson, and Keen understood that Strain and his family members would receive payoffs from Hanson and Keen in exchange for Strain's conferring the right to operate the Slidell work release program on St. Tammany Workforce Solutions, LLC. The bribes took multiple forms. The ways Hanson and Keen funneled money to Strain included giving Strain regular cash payments in amounts greater than $1,000 from the money they received from St. Tammany Workforce Solutions LLC, through B.H. and J.K. Second, as part of the scheme, Hanson arranged for Strain's relative, Person 1, to receive a check in the amount of $4,000. Third, Strain received campaign money from Hanson and Keen with money from St. Tammany Workforce Solutions, LLC, including a $2,500 payment in November 2015. Further, Strain's relative received a no-show job from the Slidell work release program that effectively doubled his annual salary. Strain, Hanson, Keen, and others attempted to conceal the scheme by, among other things, (a) hiding Hanson's and Keen's involvement in and benefit from the Slidell work release program, (b) excluding from the cooperative endeavor agreement the fact that Strain would receive cash bribes and other financial compensation in exchange for signing the cooperative endeavor agreement, and (c) providing most of the money to StrainN in the form of cash. Hanson and Keen were charged for their roles in the scheme in November 2018. They pleaded guilty on February 27, 2019 and were each sentenced to fifty (50) months in prison by United States District Judge Ivan L.R. Lemelle on October 6, 2021. "Mr. Strain broke the law and must now face the consequences, "stated U.S. Attorney Duane A. Evans. "More disturbing was that his crime was a breach of the public trust owed to the citizens of St. Tammany Parish. Similarly, because the trust between our law enforcement agencies and the citizens they protect is precious, it is imperative that collectively, we assure the public of our unwavering commitment to identity and prosecute anyone who engages in public corruption." "Rooting out public corruption remains one of the IRS-CI's highest priorities," said Special Agent in Charge James E. Dorsey, IRS Criminal Investigation, Atlanta Field Office. "Today's guilty plea underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violated the public's trust." "When a law enforcement officer chooses to violate their oath of office and commit crimes, their actions erode public trust and confidence and tarnish the entire community of dedicated public servants. Today's guilty plea is a result of the FBI's commitment to bringing corrupt officials to justice like former sheriff Jack Strain, who engaged in deceitful, corrupt practices involving kickbacks and bribery schemes for personal gain, will be held accountable," said FBI New Orleans Special Agent in Charge Douglas A. Williams, Jr. "We thank our partners at the United States Attorney's Office, Eastern District of Louisiana, Internal Revenue Service Criminal Investigation Division, and Metropolitan Crime Commission for their strong partnership and unrelenting pursuit of justice." Strain faces a maximum term of imprisonment of up to ten (10) years. He also faces a fine of up to $250,000, up to three years supervised release after imprisonment, and a mandatory $100 special assessment fee. Strain has also acknowledged that he may be liable for restitution ordered by Judge Milazzo. As part of the plea, the Government has made no representation, and cannot determine, the order in which he will serve any sentence of imprisonment imposed in this matter and in any currently pending state criminal matter in which he is a defendant. Sentencing before Judge Milazzo has been scheduled for March. U.S. Attorney Evans praised the work of the Internal Revenue Service – Criminal Investigation Division and the Federal Bureau of Investigation and thanks the Metropolitan Crime Commission for its assistance. Assistant United States Attorneys Jordan Ginsberg, Chief of the Public Corruption Unit, Elizabeth Privitera, Chief of the Violent Crime Unit, and J. Ryan McLaren are in charge of the prosecution.
