3 more charged in conspiracy to get millions in kickbacks for Big Island housing projects

Federal authorities on Monday announced three additional individuals have been charged in a public corruption conspiracy to take millions of dollars in kickback
Published: Jul. 25, 2022 at 10:53 AM HST|Updated: Jul. 25, 2022 at 1:09 PM HST
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HONOLULU (HawaiiNewsNow) - Federal authorities on Monday announced three additional individuals have been charged in a public corruption conspiracy to take millions of dollars in kickbacks for Hawaii County housing projects.

Last week, Alan Scott Rudo, 55, a former Hawaii County housing official, pleaded guilty to conspiracy to commit honest services mail fraud.

Rudo worked as a housing specialist for the Office of Housing and Community Development from 2006 to 2018. Court documents said Rudo was responsible for reviewing and recommending which developers receive affordable housing credits.

Rajesh Budhabhatti, 62, a private businessman on Hawaii Island, was charged last week Thursday with the same conspiracy.

A federal grand jury also returned an eight-count indictment against two attorneys, Paul Joseph Sulla Jr., 76, and Gary Charles Zamber, 53. Both are charged with six counts of honest services wire fraud and one count of conspiracy.

Sulla was also charged with one count of money laundering.

U.S. Attorney Clare Connors said the individuals charged had come up with and created various companies and entities as part of a conspiracy to deprive the county of affordable housing over more than six years.

According to court documents, the four individuals deceived the public into believing that Rudo was performing his work “honestly and loyally,” when he was actually using his position to obtain money in the form of bribes and kickbacks.

“Under these false pretenses and during a major housing shortage throughout Hawaii, these individuals and those charged elsewhere only thought of themselves and pocketed $3.2 million,” said FBI Special Agent in Charge Steven Merrill.

Court documents say the four collectively created, owned, managed and controlled three companies — Luna Loa Developments, LLC, West View Developments, LLC, and Plumeria at Waikoloa, LLC — that purported to provide affordable housing.

However, no affordable housing was actually developed.

Through the affordable housing agreements, they fraudulently obtained at least $10.9 million worth of land and excess affordable housing credits.

The federal government was able to seize over $2.3 million in criminal proceeds and 45 affordable housing credits.

“What this prosecution should demonstrate to the public is our continued commitment on behalf of the federal government to ensure that public corruption on all levels, be it state, city or federal, is investigated and is prosecuted, whether you are an elected public official, whether you are someone who has the honor of serving the public as a civil servant,” Connors said.

“You will be held accountable if you violate that trust.”

Budhabhatti is expected to enter a plea in court next week Monday.

This story will be updated.

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