The city has accused an active affordable housing developer of misappropriating millions of dollars in public funds lent to buy and maintain a 51-unit South Los Angeles multifamily property.
L.A. City Attorney Mike Feuer sued Figueroa Economical Housing Development Corporation and several affiliated companies last week on allegations of fraud and breach of contract, among other charges, according to the L.A. Times.
The city lent the real estate firm $2.3 million to acquire and develop the Richard N. Hogan Manor at 5500-5528 S. Figueroa Street in 1999. Without notifying the city, Figueroa Economical refinanced the property and then wrongfully transferred the deed to another company as part of a wider scheme “devised to misappropriate money for other uses,” the city said in the lawsuit.
The lawsuit alleges a series of loans and title changes on the property were meant to illegally remove the city from the equation.
Last year, a limited partnership affiliated with Figueroa Economical took out a $7.2 million loan on the Hogan Manor property. Around $4.4 million of that should’ve been paid to the city, but instead ended up in the bank account of Evergreen Advantage LLC, an entity that in 2017 took a stake in the property.
The city was alerted to the scheme when that loan defaulted and now seeks to secure those funds. The city alleges that Figueroa Economical needed the city’s consent to bring Evergreen Advantage into the picture. The city further alleges that the company submitted false financial reports to the city to hide the scheme. [LAT] — Dennis Lynch
The post City accuses affordable developer of stealing public funds for South LA project appeared first on The Real Deal Los Angeles.
Powered by WPeMatico