CHICAGO—A former Cook County employee who managed a $10.3 million federal grant to assist county residents who were impacted by floods in 2008 was arrested today on federal charges for allegedly engaging in a fraud scheme with several contractors and swindling at least $330,000 from the program. A vendor who allegedly kicked-back more than $100,000 was indicted together with the former county official.

BARRY CROALL, 45, of Montgomery, Ill.,

was a county program manager who oversaw disbursement of the grant funds for Cook County’s Department of Homeland Security and Emergency Management. He was charged with two counts of wire fraud and one count of federal program theft in a five-count indictment that was returned by a federal grand jury yesterday and unsealed today following his arrest.

Croall was scheduled to be arraigned at 3:30 p.m. today before U.S. District Judge Andrea Wood in Courtroom 1725 in the Dirksen United States Courthouse.

RONALD FORD, 57, of Country Club Hills,

who operated Strategic Management Services S.M.S. LLC, was charged with one count each of conspiracy and federal program theft. He was not arrested and is scheduled to be arraigned at 11 a.m. tomorrow before Judge Wood.

According to the indictment, between April 2010 and January 2011, Croall arranged for Strategic Management Services, a nonprofit corporation, and three other companies to perform services that were eligible to be paid for with grant funds. Croall allegedly arranged for the businesses to submit false documents inflating the amount of compensation they were entitled to and then obtained portions of the grant payments they received as kick-backs.

Croall allegedly used the funds for his own personal use, including mortgage payments for rental properties he owned in Yorkville through his company, Dove US; the purchase of a condominium unit in Yorkville; credit card payments; homeowner association fees; and an automobile. The indictment seeks forfeiture of at least $330,000 and the Yorkville condo.

The indictment alleges that Croall arranged for Strategic Management Services and Companies A and B to perform certain work on homes eligible for payment under the grant, including damage assessments, inspections, coordination of contractor visits, and related work. Strategic Management and Company A submitted invoices indicating that they had performed work at specified rates on approximately 900 and 500 homes, respectively, but the invoices allegedly overstated the number of homes and the amount of work that was performed.

As part of the scheme, Croall allegedly directed Strategic Management and other companies to submit their invoices to a nonprofit corporation, rather than to Cook County, for payment. Strategic Management and Companies A and B submitted a series of invoices in 2010, totaling approximately $741,000, to the nonprofit corporation, and the county then paid funds from the grant to the nonprofit corporation, based in part on Croall’s approval. Croall also allegedly arranged for Company C to install 1,000 appliances in eligible homes and to pay a commission to Company A as part of the scheme.

Croall then allegedly devised ways to obtain funds from the various vendors, including being employed by Company B as an independent contractor for a two-year term at $72,000 a year. Ford allegedly kicked-back at least $108,000 in cash to Croall.

The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Patrick Blanchard, Cook County Inspector General.

The government is being represented by Assistant U.S. Attorney Lindsay Jenkins.

Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. Each count of federal program theft carries a maximum sentence of 10 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.