The Seventh Circuit Court of Appeals affirmed wire fraud convictions Tuesday against two former Housing Authority of South Bend officials who used their positions to defraud the public housing agency through an elaborate kickback scheme involving fictional maintenance work.
Tonya Robinson and Albert Smith, who held leadership roles at the Housing Authority of South Bend, were convicted by a jury of multiple federal crimes related to their scheme to enrich themselves at the expense of affordable housing programs. The appeals court affirmed their wire fraud convictions but reversed the bank fraud charges, finding the government failed to meet the statutory requirements under 18 U.S.C. § 1344(2).
The Housing Authority of South Bend served as landlord for over 800 homes rented to residents in the community, operating with funding from the U.S. Department of Housing and Urban Development. The agency relied on employees for small maintenance tasks but contracted with outside companies for larger projects, including renovating properties between tenants.
According to court documents, Robinson and Smith exploited this contracting system by hiring contractors to perform fictional maintenance work on Housing Authority properties. The defendants then took a cut of the payments made for these nonexistent projects, diverting funds intended to improve affordable housing conditions for low-income residents.
The scheme operated by having the Housing Authority file draw requests for funding rather than receiving money in lump sums from HUD. This system allowed the defendants to create fraudulent invoices for maintenance work that was never performed, according to the prosecution's case.
The case was tried in the U.S. District Court for the Northern District of Indiana, South Bend Division, where Judge Jon E. DeGuilio presided. The jury ultimately convicted both defendants on wire fraud and bank fraud charges, among other federal crimes.
On appeal, Robinson and Smith challenged their convictions before a three-judge panel consisting of Circuit Judges Frank Easterbrook, Diane Rovner, and David Scudder. The case was argued on Oct. 27, 2025, and decided on Dec. 15, 2025. The court later amended its opinion on petition for rehearing on Jan. 28, 2026.
Circuit Judge Scudder wrote the opinion for the court, noting that the defendants "used their positions to enrich themselves through a kickback scheme" instead of fulfilling their duty to help tenants in need of affordable housing.
The appeals court's decision to affirm the wire fraud convictions while reversing the bank fraud charges highlights the technical requirements prosecutors must meet for different federal fraud statutes. For bank fraud under 18 U.S.C. § 1344(2), the government must identify specific false statements made to a bank, which the court found was not adequately proven in this case.
The wire fraud charges, however, met the statutory requirements as they involved the use of interstate communications in furtherance of the fraudulent scheme. Wire fraud prosecutions often focus on emails, phone calls, or electronic transfers that cross state lines as part of the criminal activity.
This case represents part of ongoing federal efforts to combat corruption in public housing programs. Housing authorities across the country manage billions of dollars in federal funds intended to provide safe, affordable housing for low-income families, elderly residents, and disabled individuals.
The Department of Housing and Urban Development has implemented various oversight mechanisms to prevent fraud and abuse, but cases like this demonstrate the ongoing challenges in ensuring public housing funds reach their intended beneficiaries rather than corrupt officials.
The conviction of Robinson and Smith sends a message to other public housing officials that federal prosecutors will pursue criminal charges against those who exploit their positions for personal gain. The defendants held positions of trust in an institution designed to serve some of the community's most vulnerable residents.
The Housing Authority of South Bend's mission to provide affordable housing makes the defendants' actions particularly egregious, as their scheme directly undermined the agency's ability to maintain and improve housing conditions for low-income residents. Every dollar diverted through the kickback scheme represented resources that could have been used for legitimate maintenance and improvements.
The case also illustrates the importance of proper oversight and internal controls at public housing authorities. Federal agencies and local housing authorities must implement robust systems to detect and prevent fraudulent contracting schemes like the one orchestrated by Robinson and Smith.
While the appeals court reversed the bank fraud convictions on technical grounds, the affirmation of the wire fraud charges ensures that Robinson and Smith face significant federal penalties for their role in the scheme. The case serves as a reminder that public officials who abuse their positions to defraud taxpayer-funded programs will face serious criminal consequences.
The decision by the Seventh Circuit provides important guidance on the elements required for successful prosecution of different types of federal fraud charges in public corruption cases involving housing authorities and other government-funded institutions.