Ex-Hawaii County housing official pleads guilty to taking $2M in kickbacks

HONOLULU (HawaiiNewsNow) - A former Hawaii county housing official pleaded guilty Monday to fraud after taking nearly $2 million in kickbacks for approving affordable housing credits.

Alan Scott Rudo, 55, pleaded guilty to conspiracy to commit honest services mail fraud.

“I used my position at the county to influence affordable housing developers,” said Rudo, in federal court.

Hawaii County Mayor Mitch Roth said he’s been shocked by the allegations. He also said this is a case of one bad apple in county government.

“I think a lot of the people in the county that had been working with the federal investigators didn’t even realize how deep it went,” Roth said.

Rudo worked as a housing specialist for the Office of Housing and Community Development from 2006 to 2018. The crime happened from 2014 to 2021.

Court documents said Rudo was responsible for reviewing and recommending which developers receive affordable housing credits.

Rudo operated three affordable housing LLCs to sell land and housing credits to three unidentified co-conspirators. Sources say Rudo is likely cooperating against the other co-conspirators.

“It was one of our county employees that was reviewing these deals and saw that something was not right and they actually contacted the federal investigators that started this investigation,” said Roth.

Rick Cassiday, housing finance expert, said Rudo “profited by taking his knowledge of what affordable housing credits are and realizing there’s a demand from legitimate housing developers that they would pay for it.”

He added, “He probably went to them and said, You guys want a project going? You want market? Let me help you do it by selling you these credit and you can resell it. That’s what they did.”

Rudo faces a maximum 20 years in prison and a $250,000 fine.

Restitution is to be determined and all sold land is to be forfeited back to the county.

“What happens with something like this, it may diminish the amount of affordable housing units in favor of a market unit and so we’re really trying to make sure that we have that ability to build affordable houses that our local families can raise their families in,” said Roth.

Rudo is scheduled to be sentenced in October.

Copyright 2022 Hawaii News Now. All rights reserved.