A former D.C. government employee pleaded guilty Wednesday to a federal wire fraud charge in connection with a scheme to divert more than $400,000 in welfare funds intended for District residents, authorities said.
Gary T. Holliday, 49, pleaded guilty in U.S. District Court for the District of Columbia, according to a statement from U.S. Attorney Jessie K. Liu, who collaborated on the case with D.C. Inspector General Daniel W. Lucas, the FBI and the U.S. Department of Health and Human Services.
Under federal sentencing guidelines, Holliday could face up to 41 months in prison, though his plea agreement could reduce that penalty. He is scheduled to be sentenced in June.
Reached by telephone Wednesday, Holliday declined to speak to a reporter. His attorney, Jeffrey S. Jacobovitz, declined to comment on the case.
D.C. Department of Human Services spokeswoman Dora Taylor-Lowe said in an email that the agency had “discovered irregularities” in welfare payments and reported them to the D.C. inspector general’s office. She praised law enforcement officials for pursing their investigation.
“The unconscionable actions of this (former) public servant violated the trust of the residents we serve,” Taylor-Lowe said. “Stealing from programs built to assist our community’s most vulnerable children and their families deserve swift and aggressive justice.”
Prosecutors said Holliday, a resident of Fort Washington, Md., was a policy analyst at DHS, where he worked in a part of the agency that reviewed applications for the Supplemental Nutrition Assistance Program (SNAP) — commonly known as food stamps — and Temporary Assistance for Needy Families (TANF).
Both programs issue electronic benefit cards to low-income families. Holliday took advantage of that system, authorities said, to siphon cash from the programs. Between March and June 2017, according to court documents, he created a fraudulent application in another person’s name for SNAP and TANF benefits.
Holliday channeled more than $400,000 to the benefit card issued as a result of that process, which he then accessed, court documents said. Holliday has agreed to repay the money, officials said.
The District is unique among cities in its control of sprawling human-services programs normally administered by states and counties. Those functions make up a substantial part of the city’s annual budget of more than $14 billion. The city’s management of federal welfare programs, in particular, has been dogged by complaints and controversy over the past several years.
City officials had moved to cut off welfare benefits for recipients who had been on the rolls longer than five years, but in the fall of 2017 — as the deadline for the action approached — they relented, sparing 6,000 adults and 12,000 children the abrupt loss of assistance.
Later that year, the nonprofit Bread for the City, joined by food stamp recipients, sued the District, alleging mismanagement of the SNAP program. The suit, which is ongoing, alleged that city officials adopted a flawed computer system to run the program over the objections of federal officials, leading to delays in benefit payments and other problems.
In the spring of 2018, the city launched a federally funded advertising campaign encouraging residents to report food-stamp fraud. However, DHS officials canceled the campaign after critics said the ads were insensitive and encouraged low-income people to spy on one another.
“Moving forward, we will work with food insecurity stakeholders and our federal partners to identify more appropriate strategies to educate residents on ways to prevent fraudulent behaviors and protect and support this important program,” the agency said in a statement.