A former employee of the county Office of Housing and Community Development is set to enter a plea Monday in federal court on charges he took almost $2 million in bribes and kickbacks to influence affordable housing projects in West Hawaii.
Alan Scott Rudo, a housing community development specialist from 2006 to 2018, is set to appear before Magistrate Judge Rom Trader in Honolulu for initial appearance, waiver of indictment, arraignment and plea to the felony information provided by federal prosecutors, according to court records.
Prosecutors charge that Rudo worked with two attorneys and one other individual to create three limited liability companies to benefit from fraudulently putting the companies forward as developers of affordable housing. Those three companies, as well as at least two other limited liability companies and two trusts, were used to distribute affordable housing credits, land and money. The companies are not named in the federal information document filed in court.
The scheme netted at least $10.9 million in affordable housing credits and a land conveyance, which were then sold, with the proceeds distributed among the conspirators, with Rudo’s share of at least $1.8 million “constituting bribes and kickbacks received in return for his official acts in obtaining the County’s approval,” prosecutors said in a July 11 document.
The properties included three lots totaling 13 acres in Kealakehe Homesteads in Kailua-Kona, 11.8 acres in Waikoloa and 4.6 acres in South Kohala.
“Rudo took official acts that allowed those companies to receive land and (affordable housing credits), all while concealing his personal interest and involvement in the companies, and the fact that he would receive proceeds derived from (affordable housing agreements) and transactions approved by the County,” the prosecutors charge.
County Housing Administrator Susan Kunz, formerly known as Susan Akiyama, who signed off on two of the three affordable housing agreements cited in the federal documents, said her office has been cooperating with federal investigators.
“The County of Hawaiʻi has been made aware of the indictment of Mr. Rudo and takes allegations of this nature very seriously,” Kunz said Thursday in an emailed response. “We have and will continue to cooperate with authorities as they conduct further investigation of his actions. I have faith in our criminal justice system and will await the court’s verdict before further commenting on the matter.”
Honolulu attorney Gary Gurmail Singh, who represents Rudo, did not respond to telephone messages by press-time Thursday.
News reports about the Office of Housing prompted Michael Konowicz, chairman of the Cost of Government Commission, to ask County Auditor Tyler Benner whether he was familiar with the case and what role the auditor could play.
“Yes, they are on our radar,” Benner said, adding that one of things his office looks at is whether there are any other investigations going on that would interfere with his office’s ability to do an audit.
“There is high public interest surrounding some of these,” Benner said.
Details in the 18-page information filed by federal prosecutor Mohammad Khatib are limited, and his office said Thursday there are no further comments. The government is seeking forfeiture of numerous properties.
But the properties are described in extensive reporting over many years by Hilo resident Pat Tummons, editor of Environment Hawaii, a monthly newspaper. The Waikoloa property was provided for affordable housing as part of a developer agreement between the county and Waikoloa Highlands Inc. in 2016, according to a September 2018 article. The affordable housing credits for that property ended up with Plumeria at Waikoloa, a company that the county apparently thought to be a nonprofit, but was not.
The complicated series of transactions among related companies with what she saw as little county oversight prompted Tummons to devote most of last month’s issue of her newsletter to the topic.
“At a time when the need for affordable housing couldn’t be more urgent, the question of how the agency’s policies and practices failed to deliver must be asked and answered,” Tummons wrote in a front-page editorial. “Even if legal action is not an option, those who were involved in the schemes outlined in this issue should be called to account. And steps must be taken to ensure this never happens again.”
(This article has been edited to show that the affordable housing credits for Waikoloa Highlands Inc. in 2016 ended up with Plumeria at Waikoloa, a company that the county apparently thought to be a nonprofit, but was not.)