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Release No. 10-082
May 7 , 2010
ESCROW AGENT TO PLEAD GUILTY TO FEDERAL CHARGES FOR EMBEZZLING $3.9 MILLION HELD FOR 23 CALIFORNIA CITIES
LOS ANGELES – The former president of a Huntington Beach company that held grant money and loan proceeds in escrow on behalf of local governments has agreed to plead guilty to embezzling millions of dollars that belonged to San Francisco, Pomona, Seal Beach and 20 other California cities.
In a plea agreement filed today in United States District Court, Belinda Exon, 55, who now lives in Phoenix, Arizona, admitted that she embezzled $3.9 million that was being held in escrow by her former company, Rehab Financial Services, Inc.
Rehab Financial is a now-defunct escrow and loan servicing agent that administered grants and loans for California municipalities. The money entrusted to Rehab Financial included funds awarded by the United States Department of Housing and Urban Development to local governments for rehabilitation programs designed to fix health and safety hazards in low-income housing, and to pay for upgrades necessary to bring low-income housing into compliance with building codes.
Exon took money that was being held in escrow and used the funds to purchase properties and vacant land in Arizona, as well as to finance two companies that she owned.
According to the plea agreement, the following cities sustained losses as a result of Exons criminal conduct:
San Francisco – $1,021,000
Pomona – $ 751,000
Seal Beach – $ 481,432
Huntington Park – $ 478,000
Westminster – $ 223,392
Buena Park – $162,563
Rosemead – $128,328
Montebello – $125,000
Apple Valley – $95,452
Camarillo – $91,975
Fullerton – $66,453
Perris – $66,000
Bellflower – $59,140
Calamesa – $42,257
Santa Cruz – $34,784
Encinitas – $29,524
Santa Monica – $26,029
Hollister – $22,195
West Covina – $10,000
Rialto – $8,791
South Gate – $7,603
Hemet – $3,000
San Juan Capistrano – $2,055
“It is all the more important in today’s trying economic environment that the federal government remain vigilant in its efforts against those who would siphon limited resources,” said Kenneth M. Donohue Sr., Inspector General of the Department of Housing and Urban Development. “The Office of the Inspector General is committed to overseeing that such valuable funding goes to those truly in need and to bringing to justice, together with our law enforcement partners, those who seek personal gain at the expense of our American citizenry.”
Exon agreed to plead guilty to one count of embezzling money from organizations that receive federal funds, a felony offense that carries a statutory maximum sentence of 10 years in federal prison. Exon is scheduled to make her initial appearance in federal court on June 7. The plea agreement filed today contemplates a sentence of up to 46 months in federal prison and requires Exon to forfeit the properties she purchased with the embezzled funds and to make full restitution to the victim municipalities.
The case against Exon was investigated by HUD’s Office of the Inspector General.
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Release No. 10-082
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