DALLAS (CN) – A nonprofit housing group claims a developer schemed to defraud the government of millions of dollars in low-income housing tax credits by forging signatures, stealing building plans and signing fraudulent tax-credit applications.
And when the man’s first group of partners was “appalled” at the scheme, and refused to do it, he found others who did, the nonprofit says in a federal RICO complaint.
Urban Progress Community Development Corporation and its president Monique Allen say defendant Noorallah Jooma approached her for help with a low-income housing project because Allen’s group had experience with tax credit deals.
Texas law requires developers receiving low-income tax credits to have experience in tax credit applications; new developers can qualify only if they bring in an experienced “co-developer,” according to the complaint.
The awards can be several million dollars, but must be used solely for construction and servicing of low-income apartments.
Allen says she agreed to help Jooma for a reduced co-developer fee of $50,000 and that Jooma was awarded two multi-million dollar contracts as a result.
“It was during this time period that plaintiffs first learned of Jooma’s fraudulent scheme,” according to the complaint. “At a meeting in Jooma’s attorney’s office, Richard Ruschman, Jooma detailed his intent to not only pocket the huge upfront developer fee, but that he intended to pocket an additional $1.1 million dollars on the construction materials on the construction side of the transaction. As Jooma explained, there would be two sets of contracts, one set would be turned into the government, stating that all construction funds had been properly used, and a second set of contracts would actually be signed with low bid general contractors for a lower amount. By this action Jooma intended to pocket approximately $1.1 million dollars without the government knowing.”
Allen says that when Jooma announced the scheme at a subsequent meeting, the contractors and architects were “appalled” and would not participate, but Jooma “was adamant that the scheme would proceed and that if the parties would not assist him he would find parties that would.”
Jooma, of Lewisville, Texas, owns and controls seven LLCs and LPs that also are listed as defendants. Allen says that Jooma did indeed find other contractors and architects who provided fraudulent pay applications and forged Allen’s signature on tax credit applications.
For instance, the complaint states: “Brian Rumsey on behalf of Cross Architects, PLLC and Watermark Construction LP in furtherance of Jooma’s scheme signed and notarized fraudulent ‘Applications and Certificates for Payment’ that were turned into the government. A copy of one such ‘Application and Certificate for Payment’ is attached as Exhibit A. In the pay application, Brian Rumsey on behalf of Cross Architects, PLLC and Watermark Construction LP certified under oath that $324,899.88 of the construction for Mineral Wells had been built. This was an absolute fraud; only $79.883.00 had been constructed. Proof of the fraud is shown by the exact same ‘Application and Certificates for Payment’ being struck down to $79,883.00 by Architettura Inc., which was signed 4 days after the fraudulent pay application and bears Noorallah Jooma’s signature acknowledging his knowledge of the fraud. A copy of the Architettura Inc. pay application is attached as Exhibit B.”
Architettura and one of its architects and contractors had withdrawn and refused to be “complicit in this scheme” at the meeting at which “everyone present, except for Jooma, (was) appalled,” Allen says.
But she says that Jooma “still sought to use each of their works” – UPCDC’s and Architettura’s – “and to continue his tax credit scheme unabated. …
“This conduct is astonishing given that Jooma signed these applications for TDHCA financial assistance under penalty of perjury,” the complaint states. “At the time of signing, Jooma knew he was making a materially false representation to obtain federal funds under false pretenses. This was yet another knowing violation of federal law. Jooma also hired Terry Wright and Wright Group of Architects, PLLC to make unlawful copies of Architettura Inc.’s architectural plans in violation [of] the U.S. Copyright Act. Jooma submitted the forged signatures, fraudulent applications, and stolen architectural plans to TDHCA [the Texas Department of Housing and Community Affairs]. Based on those forged signatures, Jooma’s false representation that Allen and UPCDC were co-developers, and the unlawfully copied architectural plans, Jooma was awarded millions of dollars in tax credits and government funding.”
In addition to Jooma, the conspiracy defendants are his companies, Dallas Jubilee Developers LLC, Accent Developers LLC, Mineral Wells Pioneer Crossing LP, Lufkin Pioneer Crossing LP, SS Seniors LLC, Murid LLC, and Murid I GP I LLC; and Brian Rumsey, Cross Architects PLLC, Terrance Wright, Wright Group of Architects Planners PLLC, Watermark Construction LP, Tim Rogers and John Gambini [both of Watermark Construction].
Allen and UPCDC seek compensatory and punitive damages for breach of contract, fraud, conspiracy and racketeering.
They are represented by Thomas Urquidez.