Report: Feds investigating Southwest Key, migrant shelter operator for thousands of kids in Texas

The Austin-based non-profit has received $1.1 billion in federal funds since the start of 2016 and currently houses 3,644 migrant children at shelters across the state.

Southwest Key CEO Juan Sanchez talks to Tribune investigative reporter Jay Root at the Texas Tribune Festival on Sept. 29, 2018.
Southwest Key CEO Juan Sanchez talks to Tribune investigative reporter Jay Root at the Texas Tribune Festival on Sept. 29, 2018.  Steve Moakley for The Texas Tribune

The U.S. Department of Justice is investigating Southwest Key Programs, an Austin-based nonprofit that currently houses 3,644 migrant children at more than a dozen facilities across Texas, according to The New York Times.

The Times reported Thursday that the U.S. attorney’s office for the Western District of Texas has launched a probe into whether the nation’s largest operator of shelters for migrant children misused government funds. A separate Times report published earlier this month said that the shelter operator, which has received $1.1 billion in federal funds since the start of 2016, had engaged in potential financial violations, including self-dealing with top executives.

The Texas Tribune reported in September that Southwest Key CEO Juan Sanchez is part owner of a property leased by Southwest Key; that stake was not disclosed on the non-profit's tax return.

Spokesman Jeff Eller said Southwest Key has “not yet been contacted by the US Attorney’s office or the FBI.”

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“We have a policy of working with any and all investigations and we will do so in this case if it happens,” he added in a statement.

Southwest Key operates some two dozen shelters across the country, many of them in Texas. One is Casa Padre, a renovated Walmart in Brownsville that currently houses 1,377 kids.

Only one other shelter operator — BCFS Health and Human Services — houses more migrant children in Texas, including 2,745 minors at a temporary tent city in Tornillo.

Disclosure: Jeff Eller, a former Texas Tribune board member, and Walmart have been financial supporters of the Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.