Third Defendant Pleads Guilty in Scheme that Embezzled Thousands of Dollars from Funds Intended to Provide Relief During the COVID Pandemic

An Amarillo woman pleaded guilty on May 11, 2026, to embezzling funds from a federal program, announced U.S. Attorney for the Northern District of Texas Ryan Raybould.

Selene Varela, 41, pleaded guilty Monday to a felony information charging Theft Concerning a Program Receiving Federal Funds.

"We rely on our public officials to ensure that our laws our faithfully and dutifully executed," said U.S. Attorney for the Northern District of Texas Ryan Raybould "Instead, the defendants planned and executed a scheme to use their public positions to line their own pockets at the expense of folks in Amarillo who are homeless-the intended beneficiaries of the pandemic program. I'd encourage the public across North Texas to reach out to my office if they witness or have information regarding public officials engaging in any corruption."

"Selene Varela abused her position of trust by embezzling federal funds intended to help individuals experiencing homelessness secure stable housing," said Acting Special Agent in Charge Aaron McCullough with the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG). "HUD OIG remains committed to working with our law enforcement partners to aggressively pursue and hold accountable those who misuse public funds and exploit positions of trust for personal gain."

In plea papers, Varela admitted that she previously worked for the City of Amarillo in the Community Development Department. From 2020 through 2022, Varela managed the intake process for homeless, or soon-to-be homeless, members of the Amarillo community who needed financial assistance to maintain housing. During the COVID-19 pandemic, the federal government funded these initiatives through the CARES Act.

Varela used her role as a city employee to create fictitious applications for this funding. In one instance, she fraudulently applied to have her own rent paid for six months-a fraudulent payment of $6,600. Varela also created accounts for fictitious landlords and tenants. She would submit false applications for payment and then cash the checks, keeping the proceeds. In total, Varela admitted to receiving approximately $41,350 in fraudulent distributions processed by the City of Amarillo.

Varela now faces up to 10 years in federal prison. Her sentencing date has not been set.

This case is related to the prosecution of two other former City of Amarillo employees who carried out similar schemes. In June 2024, Amy Dixon pleaded guilty to embezzling $465,511.65 while working in the Community Development Department. On October 23, 2024, United States District Judge Matthew J. Kacsmaryk sentenced Dixon to 24 months in federal prison. In March 2025, Vanessa Robinson pleaded guilty to embezzling $121,325.21 while working in the same department. Robinson was sentenced by Judge Kacsmaryk to 18 months in federal prison on July 22, 2025.

The United States Department of Housing and Urban Development Office of Inspector General and the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorney Sean Long is prosecuting the case and former Assistant U.S. Attorney Josh Frausto prosecuted Dixon and Robinson.