A federal grand jury indicted the former director of the Morgan City Housing Authority and three staff members in an investigation of more than $500,000 in alleged illegal bonus payments.

The indictment comes after a state audit in 2014 uncovered the questionable bonuses, as well as paperwork, allegedly falsified, to support the payments.

Former Executive Director Charles E. Spann, former Housing Manager Tori D. Johnson, Accounting Tech Diana L. Pace and Housing Manager Sandra L. Greene face federal counts of theft and conspiracy to defraud the United States.

Spann and Johnson stepped down in 2013.

Pace and Greene, who are classified employees protected by civil service laws, remain on the job.

Interim Morgan City Housing Authority Director Clarence Robinson Jr., the director of the Berwick Housing Authority who was brought in after Spann’s departure, said Monday he had not seen the indictment.

Robinson said he could not comment on the federal investigation, citing a need to meet with the housing authority board and its attorney to discuss the issue.

State auditors said $566,544 in bonuses were handed out at the housing authority under a policy that never received the required approval from the state Civil Service Commission.

The commission had approved only a one-time bonus for a Rewards and Recognition program in 2007, but staff received bonuses year after year under a policy supported with falsified paperwork to make it appear the commission signed off on continuing the program, according to the state audit.

Auditors also alleged Greene, Pace and Johnson received a total of $130,418 in raises in excess of what civil services rules allowed.