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FBI begins Chelsea inquiry

Legality in question in officials’ handling of housing chief’s pay

The FBI has begun investigating the finances of the Chelsea Housing Authority amid growing concern that agency officials may have committed crimes in paying the former chief an extraordinary $360,000 a year while concealing his full compensation from the government agencies that paid the bills.

Federal agents are looking at how the housing authority may have “spun the budget’’ to cover up former director Michael E. McLaughlin’s salary by transferring money among accounts, said one official with knowledge of the FBI’s involvement. Among other things, investigators are also scrutinizing McLaughlin’s expense and travel records, said the official, who declined to be named.

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