10262010 - News Article - Mayor stands behind indicted city official - Community development chief accused in $300,000 scam

Mayor stands behind indicted city official
Community development chief accused in $300,000 scam 

Post-Tribune (IN)
October 26, 2010

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GARY -- Mayor Rudy Clay praised his director of community development Monday, commenting publicly for the first time since a federal grand jury said she participated in a $301,247 mortgage fraud scheme. 

Jacquelyn Drago - Hunter is charged with two counts of wire fraud and aggravated identity theft. Jerry Haymon, Gary reserve police officer Phillip Rucker and mortgage broker Sheila Chandler also face wire fraud counts. 

A grand jury said Drago - Hunter forged paperwork and possibly signatures during private transactions to illegally divert money into bank accounts controlled by her and the co-defendants. 

Meanwhile, at least $5.4 million in federal stimulus grants were awarded to Gary's community development office under her leadership, according to a government website. Drago - Hunter is not accused of mishandling that tax money, but federal officials have stressed a need for public confidence in stimulus spending. 

The mayor wouldn't answer Monday when asked if Drago - Hunter would keep her job. 

"Jackie ( Drago - Hunter ) is a great God-fearing person from a great God-fearing family, and she's done a good job as community development block grant director," Clay said. "Right now that's practically all I can say." 

Drago - Hunter couldn't be reached for comment. Court records show she and Rucker surrendered Monday. Both asked for a court-appointed attorney. Drago - Hunter has filed for bankruptcy. Haymon surrendered Friday and pleaded not guilty. 

Rucker is accused of taking a kickback after recruiting a buyer for one house where a fraudulent transaction took place. Chandler is accused of misrepresenting herself to a title company, lender and others. 

Haymon is accused of filing false mechanics liens and distributing kickbacks to his co-defendants and other unidentified associates. One fraudulent transaction identified in the indictment allegedly took place at 4028 Tennessee St. Haymon has said he used tax money directed to him by City Council President Ronier Scott to renovate that house. Scott has denied being a target of the investigation. 

The other addresses involved are 3829 Connecticut St., 3617 Johnson St. and 3758 Buchanan St.