About 15 federal and state law enforcement officers swept into Cadence McShane Construction Co.'s Austin office Wednesday, hauling out boxes of records and cell phones as part of a search warrant tied to allegations the company overcharged the federal government on an affordable-housing job in Converse. Simultaneous search warrants were also served at the contractor's San Antonio and Plano locations, and no one has been arrested or detained.
The raid, led by the U.S. Department of Housing and Urban Development, marks a sharp escalation of a legal fight that began in May 2024, when former Cadence McShane employees Randall Molnar and Andrea Hughes filed a federal whistleblower complaint under the False Claims Act, according to PacerMonitor court records. The two workers alleged that a company executive instructed them to submit fraudulent change orders on the Horizon Pointe apartment project in Converse, an order both say they refused to carry out. As reported by the San Antonio Current, HUD officials sought records connected to that former employee's complaint when agents entered the company's San Antonio, Austin and Plano offices.
The whistleblower complaint claims Cadence McShane collected a 17 percent profit margin on the $45 million Horizon Pointe development, well above HUD's standard 10 percent profit cap for federally subsidized affordable housing projects. The San Antonio Current, citing an Austin Business Journal report, put the company's alleged overcharge at $7 million. HUD enforces that profit ceiling specifically to keep federal subsidies flowing toward housing for lower-income residents rather than contractor margins.
Company Says Allegations Are Baseless
Cadence McShane vice president Srinath Kasturi told the San Antonio Current that the litigation is ongoing and the company cannot comment further at this time, adding that the matter is without merit and the company must go through the process. The company cooperated with the raid, and the U.S. Department of Justice has chosen not to pursue the substantive allegations related to the employee complaint directly, though HUD's involvement and the seizure of records and devices point to an active federal inquiry that continues separately.
Cadence McShane is also involved in a whistleblower suit against Opportunity Home, San Antonio's public housing authority. In August court proceedings, the contractor sought an injunction to block Opportunity Home from obtaining internal company financial and construction records tied to the Horizon Pointe complex, according to the Austin Business Journal's reporting cited by the San Antonio Current.
A Contractor Deeply Tied to San Antonio's Skyline
The company's local footprint makes the case especially notable for San Antonio. Cadence McShane served as general contractor on The '68 Apartments at Hemisfair, an eight-story, 151-unit mixed-use development spanning 283,217 square feet that it completed in 2020 on the former site of the 1968 World's Fair, according to Cadence McShane's own project portfolio. The firm has also worked on Villas at the Rim and East Meadows Apartments, per the San Antonio Current's reporting.
Financially, the company is no small operator. Cadence McShane recorded $315.3 million in construction billings last year and employs 79 people at its Austin branch alone, in addition to its Plano headquarters and San Antonio regional office, per the Austin Business Journal. The firm operates as a general contracting subsidiary of The McShane Companies.
Opportunity Home's Own Financial Strain
The raid lands as Opportunity Home grapples with its own crisis. The agency faces an estimated $550 million in deferred property maintenance, which pushed its board of commissioners in April to approve shifting roughly 6,000 public housing units into HUD's Rental Assistance Demonstration program, Hoodline previously reported. Two months later, in June, Opportunity Home unveiled a long-term $2.5 billion redevelopment and expansion plan aimed at modernizing aging public housing sites across the city, including the historic Alazán-Apache Courts, according to KENS 5.
This is not Cadence McShane's only recent brush with courtroom scrutiny. In November 2025, the newly created Texas Business Court ruled the company could consolidate third-party legal claims against 18 sub-contractors in a breach-of-contract dispute over a 347-unit apartment complex in Leander, a decision that set early jurisdictional precedent for the court system, according to legal analysis from Cokinos Young.
What Comes Next
No charges have been filed, and authorities have not arrested or detained anyone in connection with the search warrants. It remains unresolved whether HUD will pursue criminal or administrative enforcement action, and San Antonio civil court proceedings over Opportunity Home's access to Cadence McShane's internal project and audit records are ongoing. For now, the company maintains its position that the underlying claims are without merit, even as federal investigators continue combing through the boxes and devices seized from its offices.
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