Mr. Sanchez’s wife, Jennifer Nelson, remains as a top executive.
Mr. Sanchez’s resignation came amid questions from The Times about Southwest Key’s handling of charter schools spun off from the organization. Mr. Sanchez serves on the school board. It is unclear whether his resignation will change that.
As of February, there were more than 11,000 minors in the shelter system, housed in about 100 sites. As the number of unaccompanied migrant children continued to pose a crisis, Mr. Sanchez had been central to the administration’s plans.
Southwest Key, which was sitting on $61 million in cash in the fall of 2017, also lent millions of dollars to real estate developers, acting more like a bank than a traditional charity. It has rented shelters rather than buying them, an unusual practice that has proved lucrative for shelter owners, including Mr. Sanchez and Ms. Chung, The Times reported in December.
Mr. Sanchez, Ms. Chung and a friend owned a shelter in Conroe, Tex., through a shell company. Asked by The Times last year about that potential self-dealing — whereby the executives collected rent paid by the federal government — they announced that they would seek to sell their ownership stakes. There is no record that the property has yet been sold.
A spokesman for the Department of Health and Human Services, which oversees migrant shelter grants, said late last year that the government had hired forensic accountants to review the finances of shelter operators, including Southwest Key.
Joella L. Brooks, a longtime Southwest Key employee and the current chief operating officer, was named interim chief executive. Mr. Sanchez said that a “nationwide search” would begin for a permanent replacement.
“I’m grateful for the opportunity to continue serving our dedicated employees and youth in need,” Ms. Brooks, who joined the organization almost 30 years ago, said in a statement.
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