1 of 8 in O.C. Condo Scandal Will Plead Guilty

A former schoolteacher accused of illegally converting Huntington Beach apartments into condominiums will plead guilty to two counts of wire fraud, according to court documents filed Monday in federal court.

Howard Richey, 78, of Hemet was among eight defendants, including former Huntington Beach Mayor Pam Julien Houchen, charged last week in a 74-count indictment over condo conversions done without obtaining the proper city permits or paying fees. Units were then sold for large profits.

Richey was accused of creating false documents to defraud buyers, and charged with eight counts of mail fraud and seven counts of wire fraud. He faces up to 10 years in prison, Assistant U.S. Atty. Andrew Stolper told City News Service. Richey also agreed to forfeit $845,000 in profit and pay $160,000 in restitution to Stewart Title.

Also in court for arraignment Monday was alleged condo conversion investor Jeffrey Crandall, a tax preparer. Richey and Crandall posted $5,000 appearance bonds. Trial was set for February.

Houchen, a real estate agent who faces 11 counts of mail fraud and seven counts of wire fraud, is set to appear in U.S. District Court in Santa Ana on Monday for her arraignment.

Also set for arraignment are Phil Benson, a former real estate broker who worked with Houchen at Pier Realty; Thomas Bagshaw Jr., a real estate agent and notary accused of falsifying sale documents; Michael McDonnell, accused of being a “straw buyer” on behalf of Houchen in a city redevelopment area; Harvey Du Bose, the supervising title officer at Stewart Title in Irvine; and Michael Cherney, another alleged investor.