The two fraudulent housing schemes that Alan Rudo and his co-conspirators devised resulted in the award of 316 excess housing credits to two companies that had signed agreements to develop a total of 158 low-income apartments, 122 in Kealakehe, 106 in Waikoloa.
What happened to those credits?
Forty-six of the 104 credits awarded for the Kealakehe project actually were used to purchase the land for West View Developments, the sham company set up by Rudo, Rajesh Budhabhatti, Gary Zamber, and Paul Sulla Jr. Nine of the credits were to be used to satisfy on-site affordable housing requirements. Four were sold to the Rudo-affiliated company, Luna Loa, that had the affordable housing agreement to develop the Waikoloa site.
The remaining 45 credits were seized by the U.S. Marshal’s Office.
The 212 credits awarded to Luna Loa were augmented by the four it obtained from West View, for a total of 216 credits. Of those, the audit states that 143 were “dissolved.” Of the remaining 73, 30 ended up with D.R. Horton Homes, apparently used as part of the purchase price for the Waikoloa land. Four more credits were sold to RCFC Kaloko Heights at $50,000 each. Other credits were distributed to Big Island Housing Foundation (22), Moaniala Holdings (12), and Glori Nani Mau (5).
Another matched set of credits is found in the audit report’s tabulated account of credits. KW Kohanaiki, LLC, said to have purchased 100 credits, and Bridge Aina Lea, LLC, said to have purchased 47.
Neither really purchased anything. Instead, as successor owners of property once owned by Nansay Hawaiʻi, a huge Japanese land developer in the early 1990s, they share in the credits that Nansay earned when it built workforce housing in Waikoloa. (For details on this, see the article in the March 2008 edition of Environment Hawaiʻi, “Affordable Houses Divided: Settlement Allocates Credit for Houses Nansay Built.”)
— Patricia Tummons
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