The suits allege that one of the region’s largest providers of low income housing has been inflating costs and bills to the cities for years. In one case, they say actual repair costs were around $75,000, but the cities received bills for $190,000.
The actual extent of the alleged malfeasance is difficult to gauge, but the city lawyers say that it could range between $39 and $180 million, or even more.
From the Los Angeles Times:
The cities of Los Angeles and Glendale have filed fraud lawsuits against one of the region’s biggest developers of low-income housing, revealing new details about how the politically connected firm allegedly misappropriated public money.
When Advanced Development and Investment Inc. used $2.6 million in L.A. housing funds to build apartments known as The Mediterranean, the company reported spending $396,000 for framing. The real cost, according to a lawsuit filed late last week, was $50,000.
In East Hollywood, where the developer built Harvard Circle using $3.9 million in city funds, the company reported $190,000 for glasswork. The city contends that work cost $75,600.
Read the full article here.