Former HUD Property Manager Receives Five-Year Sentence for Embezzlement

PORTLAND, Maine: A Glenburn woman was sentenced today in U.S. District Court in Portland for embezzling from an organization receiving federal funds and conspiring to alter money orders.

U.S. District Judge John A. Woodcock, Jr. sentenced Kelly Ballinger, 59, to 60 months in prison to be followed by three years of supervised release. Ballinger will also be ordered to pay restitution totaling approximately $1 million. Ballinger pleaded guilty on May 1, 2024.

According to court records, Ballinger was a former property manager for a Portland apartment complex with residences funded by the U.S. Department of Housing and Urban Development (HUD). From about October 2015 to June 2021, Ballinger stole rent payments made by HUD Housing Choice Voucher Program tenants. Ballinger would direct the tenants to pay their rent with a blank postal money order and then would place her name or that of her subordinate employee Kathleen Conway, 71, on the payee line, adding information such as "groceries" on the memo line to suggest the payments were reimbursements. In some instances, Ballinger would deflate the tenants' income to as low as $0 so that HUD would pay a larger share of the rent to disguise shortfalls.

Kathleen Conway pleaded guilty to embezzlement and was sentenced on June 6, 2024, to two years of probation and ordered to pay $35,710 in restitution.

In pronouncing the sentence, Judge Woodcock observed that Ballinger was "able to concoct a scheme that avoided detection for years." The court described her embezzlement as "calculated, deliberate, and devious."

The HUD Office of Inspector General (OIG) and the U.S. Postal Inspection Service investigated the case.

"Ballinger and her co-conspirator preyed on the vulnerability of elderly and disabled individuals and altered income and expense documents to falsely increase HUD rental subsidies, which she then funneled to her personal bank account," said Special Agent in Charge Shawn Rice with HUD OIG. "HUD OIG will continue to work with its law enforcement partners to diligently pursue and hold accountable bad actors who willfully misuse federal assets."

"The U.S. Postal Inspection Service routinely seeks prosecution of individuals like Kelly Ballinger, who swindled funds that were designated to support fellow community members with housing," said Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division. "Postal Inspectors, alongside HUD OIG, uncovered the fraud schemes employed by Ballinger and her co-conspirator, to conceal her activities and line her pockets. We will continue to support and collaborate with our federal law enforcement partners to stop those who are engaged in these types of schemes."

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