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Court Records: Broker Accused In HUD Fraud Given Deal

September 5, 1989

MONTGOMERY, Ala. (AP) _ A man accused of embezzling $2 million in federal housing funds to buy cars, jewelry and furs will be allowed to plead guilty to reduced charges after working as a drug informant, court records show.

Real estate broker Cy Walker will plead guilty to one count of embezzling from the Department of Housing and Urban Development and one of failing to file a tax return, according to documents released by federal prosecutors Monday.

In 1988, an audit by HUD’s inspector general said that Walker, under contract to handle property closings in Montgomery, hid more than $2 million, with hundreds of thousands spent on cars, a speedboat, jewelry, furs and travel.

Walker also served as an informant for a local-federal drug task force investigating Freddie Hyatt, a 43-year-old horse trainer and former football player for the St. Louis Cardinals and Washington Redskins, the documents said.

Hyatt was scheduled for trial Tuesday on federal cocaine trafficking charges.

Court and HUD records show that Walker, whose age was not available, was as a drug informant against Hyatt at the same time HUD auditors were alleging embezzlement by Walker.

U.S. Attorney Jim Wilson was not immediately available for comment today on whether federal agents were aware of Walker’s HUD activities at the time he was an informant. Calls to Wilson’s office were not immediately returned.

The documents filed Monday were requested by Hyatt’s defense to show any government promises made to Walker in the case against Hyatt.

According to the HUD audit, Walker put more than $2 million in HUD closing money from 1984 to 1987 into a bank account that he controlled.

Some of it apparently paid for legitimate agency expenses, but records show Walker also wrote $180,000 in checks to car dealers.

The audit said none of the $2 million was recovered.