Federal prosecutors agree to drop charges against ex-HUD worker for community service.
Federal prosecutors agreed Thursday to drop all charges against a Hmong community activist who was accused of making false statements on economic disclosure forms.
The only catch: Toulu Thao has to do 200 hours of community service and not break the law for the next 12 months. If he meets those terms, the four felony charges will be dismissed next year.
The agreement reached in U.S. District Court in Fresno is an unusual move for federal prosecutors who rarely offer such defense-friendly deals, Assistant U.S. Attorney David Gappa acknowledged.
He said that his office agreed to the deal in part because the U.S. Department of Housing and Urban Development, which has suspended Thao from his job as a community builder, said it might be interested in hiring him back.
HUD would not be allowed to employ Thao if he is convicted of a felony, Gappa said.
No one from HUD's Fresno office could be reached for comment Thursday.
Gappa also said that Thao, who does not have a criminal history, probably would not have received prison time if he were convicted.
But Thao's defense attorney, Jeff Hammerschmidt, said Thao faced up to 20 years in prison.
He said he believes prosecutors simply knew they had a weak case.
Veteran defense attorney Rick Berman, who is not associated with the case but has handled many federal cases, called the deal a "win-win" for the prosecution and Thao. It saves Thao the cost of going to trial and gives prosecutors "a face-saving situation where they don't have to outright dismiss the case," he said.
Thao, 50, was hired by HUD in 1998. At the time, he had helped form or been active in various organizations that served the Hmong immigrant community, including the Hmong Economic Development Pilot Project, a welfare-to-work project, and the Hmong American Community, which worked on economic development.
In February 2006, Thao was indicted by a federal grand jury and charged with four felony counts of making false statements on economic disclosure forms that were required for his HUD employment.
Prosecutors said Thao failed to report $5,200 in income he received from the Hmong Economic Development Corporation, as well as more than $7,500 his son received from the Hmong American Community, which prosecutors say did business with HUD.
Thao was also accused of not reporting his position as president of the Hmong American Political Association.
Gappa said that since Thao was a HUD employee and HUD provides funding to such organizations, it was important for Thao to disclose any financial ties to these organizations to ensure that he did not have any potential conflicts of interest.
Hammerschmidt said there are explanations for why the money Thao received was not reported. He said the $5,200 was not income, but reimbursement for money Thao had fronted for a Hmong Economic Development Corporation event.
As for the $7,500 received from the Hmong American Community, Hammerschmidt said the organization has never done business with HUD, so there was no conflict and no need to report the income. Hammerschmidt said government investigators were wrong when they concluded that HUD had given the Hmong American Community $125,000. In fact, he said, the money was given to another organization also with the acronym HAC -- the Housing Assistance Corporation.
"It's just a comedy of errors," Hammerschmidt said.
As for Thao's alleged failure to disclose that he was president of the Hmong American Political Association, Hammerschmidt said prosecutors offered no proof that Thao held such a position at the time he supposedly failed to report the position.
Hammerschmidt said Thao will not have to admit to any wrongdoing as part of the deal reached Thursday. But Gappa said that is "subject to interpretation."
In a six-page agreement Thao signed, he admits that he did not report the $5,200 he received from the Hmong Economic Development Corporation and also admits that he did not report the $7,500 his son received from the Hmong American Community. At least $5,000 of that was used to pay off Thao's credit card debt, the agreement states.
But the agreement also says that Thao and prosecutors disagree on whether Thao's actions constitute a crime.
Thao said Thursday that he's happy the charges will be dismissed, but unsure whether he will be able to repair the damage done to his reputation.
"This not only hurt me, but also the people who looked up to me for assistance," he said.
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