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Clearwater, Florida -- The Department of Homeland Security is warning the Pinellas Suncoast Transit Authority (PSTA) it could face criminal charges over misuse of federal funds.

Last week, PSTA returned more than $350,000 to the government after 10 Investigates reported the money wasn't being used properly, but that doesn't mean the agency is in the clear.

In a scathing 5-page letter sent to PSTA, Department of Homeland Security Executive Director Brad Miller says, in essence, the agency lied about how it would use the Homeland Security Grant for a series of video ads.

MORE:Homeland Security reviews PSTA grant spending

10 Investigates first pointed out that PSTA produced the ads encouraging people to ride the bus, but was also promoting the transit tax Greelight Pinellas.

MORE:PSTA uses security grant to back Greenlight tax

SEE ALSO:Senator calls for probe of PSTA use of tax dollars

The letter reveals that PSTA misled Homeland Security in the grant application by claiming the money would be "used to enhance the public awareness of their role in keeping the community safe."

However, DHS says "the ads were not used in manner expressly described in its application." The letter also points out "PSTA violated the allowable use of funds by the 9/11 act."

The Pinellas Suncoast Transportation Agency might charges over how it handled a federal grant.

DHS not only demanded the PSTA reimburse the 354,000 for unallowable costs, but also that it had to "immediately cease and desist" what it called the "inaccurate claim the ads were paid for in part by a grant from Homeland Security."

And finally, even though PSTA returned the money, DHS says, "the government doesn't waive its right to pursue criminal or civil remedies."

RELATED:PSTA backpedals, returns federal money

It's worth noting after our report aired, in the June board meeting, the agency spent almost 15 minutes discussing how inaccurate our investigation was. However, the Homeland Security letter not only substantiates our investigation, but it also means the agency is in hot water.

The issue could be a topic of discussion at Wednesday's 9 a.m. Board Meeting at PSTA headquarters 3201 Scherer Drive, St. Petersburg, FL 33716.

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