3 more charged in Big Island affordable housing fraud scheme | #phishing | #scams

U.S. Attorney for the District of Hawaii Clare Connors announced this morning the federal grand jury indictment Thursday of two Hawaii island attorneys involved with two other men in an affordable housing corruption scheme to enrich themselves.

Paul Joseph Sulla Jr., 76, and Gary Charles Zamber, 53, were each charged with six counts of honest services wire fraud and conspiracy. Sulla is also charged with money laundering, allegedly laundering the proceeds of the conspiracy to hide the source, location and ownership of the proceeds.

The four allegedly fraudulently obtained at least $10,980,000 in land and excess affordable housing credits.

As a result, Hawaii island residents were deprived of affordable housing units, which were purportedly being developed in South Kohala, Kailua-Kona and Waikoloa.

The scheme involved Alan Scott Rudo, 55, a housing specialist for the Hawaii County Office of Housing and Community Development, and Rajesh Budhabhatti, 62, a private businessman, who is expected to plead guilty Aug. 1. Rudo pleaded guilty July 18.

Rudo solicited and accepted bribes and kickbacks from Sulla, Zamber and Budhabhatti in exchange for performing and agreeing to perform official acts with the Housing and Community Development, court documents and information presented in court show.

They created three entities: Luna Loa Developments LLC, West View Developments LLC and Plumeria at Waikoloa LLC.

Rudo used his position as a public official to create and shepherd through the county approval process the agreements “that would allow developers to avoid the obligation to build affordable housing,” Connors said.

The companies were variously owned and controlled by the four defendants.

The FBI first learned of the scheme in 2018 but the illegal transactions occurred a few years before then.

Connors said a news reporter with Environments Hawaii Newsletter uncovered the information and a county employee involved in approving the documents was made aware of the activity and informed the FBI.

FBI Special Agent-in-Charge Steven Merrill said the money was meant to provide decent homes. Instead, the defendants conveyed land worth $10.9 million and sold it to other developers.

Merrill’s team was able to trace and seize over $2.3 million and 45 affordable housing credits.

It is unclear whether any of the monies seized by the United States will go back to the county.

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