Two alleged conspirators in a scheme involving fraudulent use of Hawaii County affordable housing credits want to defend themselves without lawyers.
Hilo attorneys Paul Joseph Sulla Jr. and Gary Charles Zamber, in a Sept. 1 status conference with federal Magistrate Judge Kenneth J. Mansfield, asked that their attorneys be terminated so they can represent themselves. The judge set a Sept. 28 hearing to consider the request.
Sulla and Zamber are charged with six counts of honest services wire fraud and one count of conspiracy. Sulla is also charged with one count of money laundering. Rajesh P. Budhabhatti, a Puna businessman, was charged in separate complaints with conspiracy to commit honest services wire fraud. Budhabhatti has a public defender.
The three were named in a grand jury indictment last month, after former community development specialist Alan Scott Rudo, who worked in the county Department of Housing and Community Development, pleaded guilty to accepting almost $2 million in bribes. Rudo is scheduled to be sentenced Jan. 24.
The indictment charged that the four collectively created, owned, managed, controlled and used Luna Loa Developments LLC, West View Developments LLC and Plumeria at Waikoloa LLC to make it appear as if those companies would develop affordable housing, when in fact they had no intention to do so. Those companies, as well as at least two other limited liability corporations and two trusts, were used to deceive the Housing Office, the county and its residents, and to obtain and distribute affordable housing credits, land and money, the indictment charged.
The government says the three alleged co-conspirators received affordable housing credits and a land conveyance having an aggregate value of at least $10.9 million. All three have pleaded not guilty.
“Despite receiving these awards, the conspirators did not develop any affordable housing units as promised,” the indictment stated.
The Hawaii County Council on Wednesday voted 8-0, with North Kona Councilman Holeka Inaba absent, on a resolution requesting the county auditor verify that the issuing and utilization of affordable housing credits are being carried out properly and to ensure the credits that are outstanding are legitimate. The council also sought assurances that the county has available the proper resources and plans to assure accounting of the credits.
Inaba, the resolution’s sponsor, had originally sought a more ambitious investigation by the auditor, but backed off after Auditor Tyler Benner said he didn’t want to get in the way of the federal investigation.
Developers who agree to construct new affordable housing units in excess of any requirements imposed under county law may earn affordable housing credits. The credits can be transferred to other developers, who can use them to satisfy existing or future affordable housing requirements. Housing Administrator Susan Kunz told the council last month that her office is taking a close look at internal policies and fortifying them as needed.
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.
