SAN FRANCISCO (CN) – San Francisco claims that $1 million it set aside for low-income homeowners for lead abatement and other rehabilitation was pilfered by a company that had managed city escrow accounts since 1990.
Rehab Financial “has ceased all communication with San Francisco,” and closed its offices last week, according to the complaint in Superior Court. San Francisco says at least 12 other cities and counties may have been victimized.
The city says its accounts hold only about $58,000 of the more than $1 million that should be there.
In its claim of conversion and breach of fiduciary duty, the city says that co-defendant Belinda Exon, Rehab Financial’s president, has been investigated by the U.S. Attorney’s Office and the U.S. Department of Housing and Urban Development for “possible misappropriation, theft, and embezzlement of program funds to her personal uses.”
A City of Pomona employee sounded the alarm last week after visiting Rehab Financial’s office in Huntington Beach and finding it closed, “with no sign of any active operation.”
San Francisco seeks restitution of $1,080,217, plus civil penalties, punitive damages and costs.
Defendants include Rehab Financial, Belinda Exon, Barbara Wood, Cheryl Isaacson, and Gayle Bloomingdale, all of them owners, officers or employees of Rehab, and signatories to its bank accounts.
The City and County of San Francisco are represented by City Attorney Dennis Herrera.