NEW ORLEANS -- Two former St. Tammany Parish sheriff's deputies were arraigned in federal court in New Orleans on Tuesday, charged with setting up a million-dollar kickback scheme with former Sheriff Jack Strain.

David Hanson and Clifford “Skip” Keen pleaded not guilty to conspiracy to commit honest services wire fraud and soliciting a bribe. But they are expected to change their pleas to guilty soon and cooperate with federal prosecutors as they zero in on their former boss and close friend, Strain.

The alleged scheme is related to a no-bid contract Strain gave to St. Tammany Workforce Solutions, a company owned, in part, by Hanson and Keen’s adult children.

Strain_Graphic_1544571681454.jpg

A bill of information charging Hanson and Keen last month alleges Strain blessed an arrangement that let Hanson and Keen retain their jobs as deputies while their kids sent more than $1.2 million in profits back to them and to Strain and his family members.

WWL-TV’s Katie Moore, along with Sara Pagones at The New Orleans Advocate, first exposed major issues with the St. Tammany work release program more than five years ago, including raising questions about the no-bid contracts and the ties between the work release program operators and the sheriff’s office.

Work release programs set up barracks-like housing for prisoners to work civilian jobs near the end of their prison sentences. The private companies that ran those programs collected nearly 70 percent of the inmates’ wages and charged them for food and beverages.

Prosecutors do not name Strain in court papers, but instead they call him "Public Official 1." And they allege that Hanson and Keen set up the kickback scheme with Strain's full permission and participation.

Keen and Hanson both declined to comment through their attorneys, Keith Couture and Robert Stern, respectively. Hanson appeared much thinner than he did during his days as a deputy, having grown out shoulder-length gray hair and a goatee.

Each of the former deputies were released Tuesday on $25,000 bonds and a trial date was set for Feb. 11, 2019, but a trial is unlikely because of the way they were charged. They were charged in a bill of information instead of a grand jury indictment, indicating they are planning to plead guilty. But that is not allowed under federal rules at their first appearance and arraignment, so they will have to schedule a new hearing to change their pleas to guilty.

Assistant U.S. Attorney Jordan Ginsburg said each faces a maximum of five years in prison or a $250,000 fine if convicted. The case was assigned to U.S. District Judge Ivan Lamelle.