FBI aids in condo probe

Dave Brooks

Federal agents have joined police in an investigation of 120

condominiums purportedly converted from apartment buildings without

the proper permits and sold to buyers who had no knowledge of the

changes.

Huntington Beach Police Chief Ken Small said Monday that agents

with the FBI and the U.S. Attorney’s office have been contacted and

offered to help in the investigation.

“They’ll be looking at whether any federal bank fraud was

committed in these conversions,” Small said. “To acquire these

properties, individuals had to work with banks and financial

institutions. We’re looking to see if these individuals possibly

provided false information to the banks.”

FBI Spokeswoman Vickie Hampton-Franklin said the bureau was

involved in the investigation but couldn’t comment on the details of

the case. She said the matter was also being looked at by a federal

grand jury.Last summer, city planners discovered 120 apartments in

Huntington Beach had been converted into condominiums, reportedly

without the proper permits and then sold without the knowledge of

people who purchased them.

Condo owner Renee Tarnow said the situation has made it nearly

impossible to sell or refinance her home.

The Huntington Beach Police Department has launched an

investigation into the condo sales to look for criminal activity. At

least one of the condos was allegedly sold by Councilwoman Pam Julien

Houchen, who has recused herself from voting on the law helping condo

owners clear up their titles.

Houchen did not return calls for comment.

The ordinance would streamline the approval process but much to

the ire of condo owners. It would require them to pay as much as

$20,000 into an affordable-housing fund to have their condos properly

rezoned. The council was scheduled to finalize the ordinance at

Monday night’s meeting. Just before that vote was taken, Houchen

disappeared into council chambers and never returned to the floor.

Approval of the ordinance was delayed after Councilwoman Debbie Cook

attached a new clause to the bill, allowing only people who purchased

condos before June 1 to be eligible.

“Otherwise, we’ll have a situation where people will intentionally

convert their apartments to take advantage of this ordinance,” she

said.

By law, adding a new amendment to an ordinance requires that it’s

reviewed once more by the council before it can be finally approved.

That will likely happen at the council’s Aug. 2 meeting.

In the meantime, resident Roy Richardson told the council he plans

to submit a letter to the Orange County Grand Jury, asking it to look

into the matter.

Richardson said he believed the issue was serious enough to

warrant an investigation by the 19-member panel, which can subpoena

people and issue indictments. If 12 members agree the issue needs to

be investigated, the grand jury will work with county counsel and the

district attorney’s office to begin investigating the matter.

* DAVE BROOKS covers City Hall. He can be reached at (714)

965-7173 or by e-mail at dave.brooks@latimes.com.