In what may turn out to be the largest RICO case in recent history, both Los Angeles and Glendale City have filed cases stating that Advanced Development Investment (ADI, a housing developer/investor) and a few other similar firms, defrauded the Cities of roughly $250,000,000.00.
Los Angeles and Glendale, suing for $210M and $33M (respectively), are saying that ADI, Ajit Development & Investment, Pacific Housing Diversified (PHD), and the employees, shareholders, and agents, all profited from by fraudulently obtaining money and loans from government Affordable Housing Trust Fund (AHTF); a fund that is set up to help developers create and maintain affordable housing.
From 1992 to 2009, the alleged crimes went unnoticed, until a “break-up” between the two major defendant (Salim Karimi & Jannki Mithaiwala), resulted in the court appointing a receiver to handle the shares these two held in the aforementioned companies. It was this “receiver” who noticed that there were substantial inequities in the taxes of the various companies, and hired an independent accounting firm (Crowe Horwath) to audit the books.
Upon completion of the forensic audit, the firm concluded that the defendants had allowed and taken part in “pervasive fraud, horribly deficient record keppeing, deficient banking operations, destruction of records to conceal fraudulent construction invoicing, and misappropriation of funds”. In essence the investors, firms, agents, and employees were billing the cities for work undone, over charging for work done, and claiming tax credits in conjunction with these projects.
Glendale is suing the same defendants as Los Angeles, with the addition of a few individuals and a few more companies (Metropolitan City Lights, Glendale City Lights, Metro Loma, and Vassar Project). Glendale is charged them with the defrauding of more than $33,000,000.00 on four affordable housing projects.
These cases will, without a doubt, take a while to begin and even longer to be concluded; as a slew of evidence and attorneys are involved. Ultimately, and it is sad to say but, the attorneys will be the only ones who will benefit at all from the large cases; as the money taken has reportedly already been moved outside of the country (to india), and the blow to low income and affordable housing has already been dealt.
May justice prevail!
John is the Vice President here at JohnHart, and as such is responsible for managing and directing the firm towards obtaining its ultimate goals.
He is also one of our main contributors on the Blog. (please see his profile page on the main site for more information.)
that’s fkd up. i’ve been on the sec8 wating list for 16 years.ppl are just abusing it.i could of had it by now.thanx greedy ppl.