A former City of Amarillo employee has pleaded guilty in federal court to embezzling more than $41,000 from a U.S. Department of Housing and Urban Development (HUD) program, marking the latest in a series of financial crime cases tied to the city’s Community Development Department.
Selene Varela entered a guilty plea on Monday in the U.S. District Court for the Northern District of Texas in Amarillo to one count of theft concerning a program receiving federal funds. The case involves fraudulent activity connected to the Emergency Solutions Grant (ESG) program, which is designed to provide rental assistance and housing support to individuals and families facing homelessness or housing instability.
According to court records, Varela worked intermittently for the City of Amarillo beginning in 2014. By 2019, she was employed in the Community Development Department as part of the Continuum of Care program. In her role as a Homeless Management Information System (HMIS) analyst, she helped process intake applications for residents seeking emergency housing assistance.
Federal documents state that between September 2020 and August 2022, Varela carried out a scheme to divert ESG funds for personal benefit. She created fraudulent Payment Voucher Packages, listing her own address as the location requesting assistance. Because she did not meet eligibility requirements for the program, she allegedly used relatives’ names and the identity of her landlord—both of whom were unaware of the activity—to submit false applications.
One early instance of the scheme involved a request for six months of rental assistance. Based on the falsified documentation, the City of Amarillo issued more than $6,000 in grant payments to her landlord in September 2020.
The fraudulent activity continued and expanded over time. Investigators found that Varela later used additional relatives’ information to create fake landlord profiles and tenant identities within the ESG system. Payments were issued to these individuals, who then cashed the checks and transferred the money back to Varela. This portion of the scheme operated from June 2021 through August 2022 and accounted for tens of thousands of dollars in additional losses.
In total, Varela admitted responsibility for approximately $41,350 in fraudulent distributions from federally funded housing programs administered by the city.
Court filings also reveal that Varela was not the only employee implicated in misconduct within the department. Her supervisor, Amy Dixon, is currently serving a prison sentence for embezzling more than $465,000 from the same program. Another former employee, Vanessa Robinson, was previously sentenced to prison for stealing over $121,000 from related funds. These cases highlight a broader pattern of financial abuse within the city’s housing assistance operations during the same period.
Under federal law, theft involving programs that receive federal funding carries significant penalties. Varela faces a potential sentence of up to ten years in federal prison and fines reaching $250,000. She is also required to pay restitution for the stolen funds, and additional penalties may be imposed at sentencing.
The case underscores ongoing scrutiny of internal controls within federally funded housing programs and the importance of oversight in ensuring that emergency assistance reaches eligible recipients. Federal authorities continue to review related transactions as part of broader efforts to prevent similar fraud schemes in public assistance programs.
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