Developer Accused in Kickback Scheme

The U.S. attorney’s office filed a civil complaint Thursday against Democratic Party contributor and Brentwood developer A. Bruce Rozet, alleging that he and a business partner received an estimated $5 million in illegal kickbacks from managers of federally subsidized low-income projects.

It was the latest in a series of charges leveled over the last decade against Rozet, whom federal officials consider a notorious slumlord.

Authorities said the scheme allowed Rozet and a partner, Deane Earl Ross, owners of West Los Angeles-based Associated Financial Corp., to receive money that should have been spent on the upkeep of the projects.

Federal officials estimate that Rozet’s companies and their affiliates control about 235 properties nationwide. The properties receive an estimated $71 million in subsidies annually.

The 12-count complaint, filed by the U.S. attorney’s office in San Francisco, lists 15 properties at which the kickback scheme allegedly took place, most of them in Northern California and Las Vegas. One Los Angeles County property was listed--Palmdale Park, in Palmdale.

According to the complaint, Rozet and Ross engaged in a fee-splitting arrangement with a management company. They reportedly granted the company an exclusive contract on Associated Financial Corp. properties after the firm agreed to give Rozet and Ross a third of the management fees paid by the Department of Housing and Urban Development.

HUD officials declined to comment publicly on the complaint Thursday but scheduled a news conference today in San Francisco. But one official, who asked not to be identified, said: “When a bad landlord abuses taxpayer dollars, we will identify them, track them down and make them pay.”

In a telephone interview Thursday, Rozet denied the allegations.

“The statements made by the government are untrue and they are fully aware that they are untrue,” he said. “It’s a scurrilous attack on someone totally innocent of wrongdoing. This is nothing more than a publicity stunt.”

Rozet said the money in question was transferred to a Chicago-basement management company that had agreed to take control of several Associate Financial properties. He said HUD officials were aware of the transaction and approved of it in advance.

Once considered a respected expert in the field of low-income housing, Rozet has in recent years faced a series of accusations from federal and local authorities. Officials have said the millionaire businessman has cost the government millions of dollars by abusing federal programs that allowed him and his partners acquire low-income housing, collect subsidized rents and receive tax breaks.

In 1994, then-HUD Secretary Henry G. Cisneros said Rozet “got filthy rich off this program and he left filthy places behind him for people to live in.”

In 1995, Rozet was linked to the drug-infested Belle Haven Apartments in Landover, Md., whose investors included Commerce Secretary Ronald H. Brown.

Last year, a fire ripped through a Chicago building owned by a Rozet-managed partnership, killing four people and injuring dozens. Critics blamed the fire on poor maintenance.

Rozet denies charges that he is a slumlord.

“Overall, 95% of all the properties we have in the country received satisfactory or better ratings from HUD inspectors,” he said.